An irreverent Wall Street Blog
BrokeAndBroker.com Blog by Bill Singer Esq WEEK IN REVIEW
January 7, 2023
Imagine That a $10 Million FINRA Arbitration Claim Settles for $100,000 (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6821/janney-finra-arbitration/
Those getting sued tend to anticipate that initial demands for damages will be bloated, padded, and a tad over the top. Which may also explain why defense counsel often respond to the first-round of damages demands with eye-rolling and laughter. After that initial reaction, savvy defense counsel may resort to the tactic of "pay to play," and force an adversary to invest time and energy into preparing for trial before a last-minute settlement offer is made in the hallway. As Dr. Evil realized, one million bucks ain't what it used to be. Which brings us to the question of what's a demand for ten million dollars in damages worth in a FINRA arbitration case? $100 billion dollars? $1? Somewhere in between?
Federal Court Says Customer Had Duty To Notify Schwab of Malfunctioning Order System (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6829/schwab-order-system/
The Wall Street of 2023 isn't the Wall Street of 2020 or 2021. The meme stock frenzy has passed. We're not talking as much about Robinhood and Reddit, or how social media and Covid are fueling a trading mania. Looking back to those frenetic days, in the rush to cut commissions, expand online trading, and cater to those eager to "play" the stock market, brokerage firms were frequently overwhelmed by surges in volume or computer outages. Unfortunately, Wall Street expanded to a point where its operational capacity didn't keep pace -- and the industry's regulators failed to keep up. In a recent lawsuit against Schwab, a customer raises many of these issues on a stroll down a not-too-distant memory lane.
Removal of FINRA Arbitrator Cited by Schwab and Interactive Brokers in HFT Customer Dispute (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6819/finra-arbitration-nondisclosure/
As we start a new year, we are asked, yet again, to consider whether FINRA provides a fair arbitration venue. Yet again, we are asked to consider whether FINRA is competently running its arbitration venue. Yet again, we are asked to consider whether FINRA is making an effort to tackle the growing chorus of complaints by both the industry and public customers about a lack of policing of its roll of arbitrators and a lack of effective, timely intervention to nip problems in the bud. All of which prompts veteran industry reform advocate Bill Singer, Esq. to call upon FINRA's Board of Governors to conduct an inquiry. To do something. To do anything. Yet again, Bill knows that FINRA's lackluster Board will likely punt, if even that.