February 23, 2012
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in November 2010 and as amended, public customer Claimant Dimopoulos alleged a claim arising from investments in GM Preferred stock and she asserted the following causes of action:
1) failure of Respondents to invest according to Claimant's instructions;
2) Respondents knowingly deceived Claimant;
3) Claimant was shuffled from broker to broker receiving no help [deemed by the Arbitrator to be an allegation of negligent supervision]; and,
4) Respondents' investments in preferred stock in Claimant's account were inappropriate for Claimant.
Claimant sought $31,986.80 in compensatory damages; $2,000 in punitive damages; and $425 in interest. In the Matter of the FINRA Arbitration Between Nicki Lynn Suitor Dimopoulos, Claimant, vs. Wachovia Securities, LLC and Richard J . Dobler, Respondents (FINRA Arbitration 10-05260, February 16, 2012).
Respondents generally denied the allegations, asserted various affirmative defenses, and requested the expungement of the matter from Respondent Dobler's Central Registration Depository records ("CRD").
I am so taken with the clarity of the sole FINRA Arbitrator's Decision in this case that I have set it forth in full-text below:
Claimant failed to prove willful wrongdoing or unsuitability. However, the evidence revealed that after Respondent Dobler left the local office (less than 90 days after Claimant's purchase), there was confusion and indecision regarding the GM preferred stock transaction, with Claimant's spouse, Evangelos Dimopoulos, dealing with multiple people, including a November 9, 2007 "Client Note" by an unknown individual indicating there had been ongoing confusion even before the "Formal Complaint."
The Arbitrator finds that Claimant's loss was partly due to her own negligence in handling her account, and partly due to Respondent Wachovia's negligent supervision of Respondent Dobler's departure, and that both contributed to the indecision in the timely disposition of the GM preferred stock. Accordingly, the Arbitrator awards Claimant the sum of $5,000.00 in this matter.
Respondent Wachovia is liable for negligent supervision of Claimant's account after Respondent Dobler's departure from Wachovia and Respondent Wachovia shall pay to Claimant compensatory damages in the sum of $5,000.00, pre-judgment interest specifically denied.
Claimant's claims for relief against Respondent Dobler are denied.
[T]he Arbitrator recommends the expungement of all references to the above captioned arbitration from Respondent Dobler's registration records . . .
Respondent Dobler was not involved in Wachovia's negligent supervision. Respondent Dobler did nothing wrong and left the local office within 90 days of Claimant's purchase. He had nothing to do with Claimant's negligence and Wachovia's negligent supervision regarding the timely disposal of the GM preferred stock.
Any and all claims for relief not specifically addressed herein, including Claimant's request for punitive damages, are denied. . .
Bill Singer's Comment
What can I say other than "Wow"? An excellent FINRA Arbitration Decision.
This Arbitrator goes the distance - not only to apportion liability but to make it clear that the client was partially to blame for her own negligence, that Wachovia was negligent in supervising the account, but that the broker's conduct warranted only exoneration. As Claimant framed it, she got the old shuffle upon stockbroker Dobler's departure from Respondent's employ. Claimant had a problem with her GM stock but seemed to be handed off from one individual to another to another, and that ineffective response not only failed to resolve the issue but also exacerbated the situation and likely fueled the resulting lawsuit.
If you read enough public customer complaints, you tend to note a common theme: No one "owned" the problem; no one said to me that I'll get back to you with a firm answer. It's not a unique issue with big firms. Sure, you hear a lot of grousing by the customers of Merrill Lynch, Morgan Stanley, and TD Ameritrade; but you're just as likely to hear the same anger directed at the runaround folks experience at E*Trade or Charles Schwab or some mom-and-pop operation. Ineffective customer service has fomented more problems into lawsuits than anything else. The most effective way to nip a customer problem in the bud is for someone in customer service to quickly and professionally intervene, to take personal responsibility for timely getting back to the client, and for coming back with a solution. Clearly, that didn't happen here.
Ah, but if brokerage firms were more attentive to their customer service, what would I and other lawyers do for a living?