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TD Ameritrade Customer Loses Incorrect Address FINRA Arbitration
October 24, 2022
In today's blog we cover a recent FINRA Arbitration Award involving a TD Ameritrade representative, who told a customer something about another, unnamed licensed broker; and in the telling of that something to the customer, there was reference to a Buy Order that would be priced at the time of its placement but for the fact that the intended order was blocked because of a wrong address; and, notwithstanding the blocked order, the representative told the customer that the other licensed broker could adjust the price of the order, but in saying "could," the representative didn't assert that the other broker "would" adjust the price. Wow . . . lemme catch my breath. Please, you take it from here.
Case In Point
In a FINRA Arbitration Statement of Claim filed in November 2021, public customer Claimant Noibi, representing himself pro se, asserted misrepresentation and failure to execute a trade. At the hearing, Claimant sought $62,132 in damages. Respondent TD Ameritrade generally denied the allegations and asserted affirmative defenses.
In the Matter of the Arbitration Between Ariyo Noibi, Claimant, v. TD Ameritrade, Inc., Respondent
(FINRA Arbitration Award 21-02810)
https://www.finra.org/sites/default/files/aao_documents/21-02810.pdf
SIDE BAR: The FINRA Arbitration Award asserts that the failed trade involved "shares of DWACU." That symbol refers to "Digital World Acquisition Corp." As noted in "Trump-linked Digital World Acquisition Corp shares are now around $16 after hitting $97 earlier this year" (CNBC / September 23/24, 2022)
https://www.cnbc.com/2022/09/23/trump-merger-partner-shares-fall-dramatically.html
Shares of Digital World Acquisition Corp. fell this week as the company missed a key deadline to hold on to about $1 billion in financing for its proposed merger with former President Donald Trump's media company.DWAC, which is a special purpose acquisition company, or SPAC, has been set to be the vessel to take Trump Media and Technology Group public. But the deal with Trump's firm has run into several financial and legal obstacles.At its 2022 peak, DWAC's stock traded at $97. Now, its share price sits around $16 as markets slide, the appetite for SPACs dries up and Trump faces mounting legal peril. The stock fell about 3% Friday. . . .
Explaining the Award's Explaination
The Sole FINRA Public Arbitrator denied Claimant Noibi's claims and published an "ARBITRATOR'S EXPLAINATION [sic] OF DECISION":
Based upon the evidence presented, the Claimant failed to establish that the initial representative ("Ms. A") stated to Claimant that the licensed broker, in order for Claimant to place a buy order for the stock under discussion, would be at the price that Claimant would have received at the time he initially attempted, but was blocked from doing so, based upon an "incorrect address" trading restriction. At most, what Ms. A stated is that the broker had the ability to make a price adjustment, by simply stating that making a price adjustment is something the licensed broker "can" do. No evidence was presented that she advised Claimant that the broker would, after speaking with Claimant, make a price adjustment.
Bill Singer's Comment
The Noibi Arbitration Award does not exhibit much "quality control" by FINRA. We need look no further than the heading of "ARBITRATOR'S EXPLAINATION OF DECISION" to come across a typo: "EXPLAINATION" is a misspelling of "EXPLANATION." I make plenty of spelling errors in my blogs (many of which I don't catch until after something is posted), so I'm not suggesting that this is the end of the world; however, it is likely that the misspelling "EXPLAINATION" was flagged by a spellcheck program but no one at FINRA noted the error. Beyond failing to catch spelling errors, no one at FINRA seems to have read this sentence in the Award:
Based upon the evidence presented, the Claimant failed to establish that the initial representative ("Ms. A") stated to Claimant that the licensed broker, in order for Claimant to place a buy order for the stock under discussion, would be at the price that Claimant would have received at the time he initially attempted, but was blocked from doing so, based upon an "incorrect address" trading restriction. . .
The above five lines are one and only sentence. Seriously -- get out a pad and pen and try to write out what the above sentence actually states (not what you assume):
- Based upon the evidence presented
- Claimant Noibi failed to establish that
- "initial representative" Ms. A had stated
- that the "licensed broker" . . .
Okay, what is it that Ms. A stated about the licensed broker? When we get past the first parenthetical phrase ("in order for Claimant to place a buy order for the stock under discussion, . . .), the next word should be a verb indicating just what it was that the licensed broker was supposed to have said or done. Instead, we are told that the "licensed broker . . . would be at the price that Claimant would have received . . ." That transition makes no sense. The EXPLAINATION fails miserably to explain what Ms. A stated to Claimant Noibi about what the licensed broker did or didn't do or said or didn't say. You may infer something or you make think that you know what the Arbitrator meant but that's all speculation. Further compounding the confusion is the introduction of two different parties:
- Ms. A who is described as the "initial representative;" and
- The unnamed "licensed broker."
The adjective "initial" suggests that Ms. A was replaced by some other stockbroker, who was assigned to service Claimant Noibi's account. Or not. Is there a difference between a representative and a broker at TD Ameritrade? Why was the customer even speaking to Ms. A if she was no longer servicing his account? As if things weren't muddy enough, the Award further clouds the issues:
At most, what Ms. A stated is that the broker had the ability to make a price adjustment, by simply stating that making a price adjustment is something the licensed broker "can" do. No evidence was presented that she advised Claimant that the broker would, after speaking with Claimant, make a price adjustment.
So, lemme see if I got this (which I don't). Initial rep Ms. A told customer Noibi something about another, unnamed licensed broker; and in Ms. A's telling of that something to Claimant, there is reference to a Buy Order that would be priced at the time of its placement but for the fact that the intended order was blocked because of a wrong address; and, notwithstanding the blocked order, Ms. A told Noibi that the other licensed broker could adjust the price of the order, but in saying "could," Ms. A didn't assert that the other broker "would" adjust the price; however, as to why Ms. A was opining to customer Noibi as to what another broker could or would do about a seemingly busted order isn't explained, which is puzzling because it seems that Ms. A was no longer the servicing broker for Claimant's account. Or not. Or was. Or wasn't. Or I'm still inferring something that wasn't implied or I'm not inferring something that was implied.
Notwithstanding my erroneous inference or the Arbitrator's meandering implication, its seems that FINRA has little, if any, quality control when it comes to publishing a FINRA Arbitration Award. Further, it appears that TD Ameritrade's customer service is less than effective when it comes to answering an unhappy customer's questions and offering some price adjustment for a rejected order.