Fidelity Bond Insurance .......Should a club have one?
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Fidelity Bond Insurance .......Should a club have one? I did search and read comments by Lynn O and Jerry D, from 2000 and 2009. It also seems Fidelity Bond used to cost $40 and now costs $80 for a small portfolio under $20K. I'd like to present more details to my club, so they can choose. I can't find it listed at BI website. I thought most clubs have it, but it seems I am mistaken. Any other comments about Fidelity Bond Insurance? thanks, Etana Stockettes, Silver Spring, MD Hi Etana,
BI clubs that pay for the club wraparound membership get the bond included. I know of no BI club that has chosen to drop the "club portion" of their affiliation, nor any non-BI club that has ever purchased, or needed to use, the bond.
Lynn O.
On Tue, Dec 15, 2009 at 9:29 PM, Etana Finkler <etana_finkler@bivio.com> wrote: I did search and read comments by Lynn O and Jerry D, from On 12/15/09, Lynn Ostrem wrote: > BI clubs that pay for the club wraparound membership get the bond included. > I know of no BI club that has chosen to drop the "club portion" of their > affiliation, nor any non-BI club that has ever purchased, or needed to use, > the bond. We've had one instance of this situation in the last 10 years. I don't really know the details of what happened, but the FBI was involved and the president/treasurer is in jail for a long time, apparently. The portfolio was larger than $20K. I believe the best way to avoid problems in your club is to have two or three officers and to use AccountSync. AccountSync notifies you all transactions by email. What happened in the case above was that the treasurer/president started fudging the books when trades started going sour. If two or three people had been monitoring the actual transactions via AccountSync, it would have been in somebody's fact that something was up. There have been quite a few cases of embezzlement in Boulder in the last few years. It's always been cooked books. One person in charge without oversight. At bivio we have a policy of open books. We all see the transactions, and we go over the balance sheets and income statements fairly regularly with our entire staff. One of the reasons bivio.com is only available as a Web service is that it allows all members to check all transactions. Cheers, Rob Disclaimer: statements are opinions expressed by bivio Customer Support and are not official statements from any government agency. These statements are not intended to replace professional legal or accounting advice. When in doubt, follow the advice of your lawyer or accountant who is familiar with your particular circumstances. In our Crow River Club, we have always balanced the books every single month. A valuation statement showing the total cash and market values is distributed to every member. The latest bank and broker statements are available for review at each meeting. They match to valuation statements to the penny. All any member would have to do is take a quick peek.
This alleviates a lot of problems, and makes it much easier at year end, since any errors were caught and fixed during the year.
Also, teaching members how to use the bivio website (or myiclub.com, for that matter) when they join the club will make them more willing to actually look at the books. All of our members do it. I can't imagine anyone in our club getting away with cooking the books! <G>
Lynn Ostrem
Crow River Investment Club
But it doesn't eliminate the problem that the fidelity bond addresses, namely, what if your treasurer were to liquidate your club's assets and skip to Brazil. If that were to happen, the fidelity bond would replace the lost assets.
I'm not advocating that clubs take the fidelity bond. I think the rates are fairly high for the level of protection provided. But clubs should understand exactly what the insurance policy covers and why it might be useful.
Ira Smilovitz
Join me at InvestEd 2010 Investor Education at Its BestTM
Baltimore, MD August 6 - 8, 2010 http://www.investor-education2010.org/ In a message dated 12/16/09 18:11:41 Eastern Standard Time, garbagecop@gmail.com writes:
iras1 writes: > But it doesn't eliminate the problem that the fidelity bond > addresses, namely, what if your treasurer were to liquidate your > club's assets and skip to Brazil. If that were to happen, the fidelity > bond would replace the lost assets. For $80, you get insurance on a portfolio up to $20K. Just make sure your treasurer owns a car worth more than $20K, which you can seize when he (it's always a he ;-) runs off with your $20K. > I'm not advocating that clubs take the fidelity bond. I think the > rates are fairly high for the level of protection provided. But > clubs should understand exactly what the insurance policy covers and > why it might be useful. If you can actually understand any of your insurance policies (especially health insurance), please send me an email, and you can explain mine to me. :) Cheers, Rob Disclaimer: Statements are not the opinion of bivio Customer Support, the Daily Show, Bill O'Reilly, and are not officially statements from any government agency, except those agencies which we can't name here. These statements are not intended to replace professional legal, accounting, or comedic advice. When in doubt, follow the advice of your lawyer, accountant, or comic who is familiar with your particular circumstances or sense of humor. |
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