In a Statement of Claim filed on July 23,2009. Claimant Wells Fargo Advisors, LLC f/k/a Wachovia Securities, LLC alleged that Respondent William G. Adelsberger
In the Matter of the Arbitration Between Wells Fargo Advisors, LLC, f/k/a Wachovia Securities, LLC, Claimant, vs. William G. Adelsberger, Respondent (FINRA Arbitration 09-04418, July 9, 2010).
Respondent Adelsberger did not file a Statement of Answer.
Claimant filed a Motion for Default or. in the alternative, a Motion to Preclude and for Sanctions citing the fact that Respondent did not file a responsive pleading as required by the FINRA Arbitration Code. Respondent did not file a response to the motions.
On or about June 17, 2010, the Arbitrator issued an Order that granted Claimant's motion as follows:
Bill Singer's Comment: There is a timeless question from registered representatives: What's the worst that could happen to me if I just turned my back on the whole mess and simply walked away?
The damages awarded in this case provides a stark answer. However, the RR's exposure doesn't simply end with the award of damages -- just over the horizon could be a bar from the industry for non-payment of the Award, collection efforts, court-ordered judgments/liens/garnishments, and bankruptcy, etc.
Also, another oft-asked question by RRs is What happens if I screw up a few trades -- can they really come after me?
While the answer to that question may well have been somewhat different if Respondent Adelsberger had put in an appearance at the arbitration, the Panel's award of nearly $30,000 in damages plus interest as compensation for trading errors sort of spells out your liability.