Bllog by Bill Singer Esq WEEK IN REVIEW

October 13, 2018
If you've been following Puerto Rico's financial crisis, you know that the Commonwealth's bonds are worth about the paper that they were printed on, but for the fact that there are liens on the paper and pending judgments on the ink. Some folks knew that they were investing in junk, however, and paid pennies for what they hoped would be dollars in returns. They knew the risks. They accepted it in consideration of the pay-off. Other folks bought what they were sold in the form of tax-advantaged debt from the purportedly venerable Commonwealth: turned out to be dollars invested into what may pay pennies. In today's featured FINRA arbitration, we got an unhappy customer who is seeking at least $2 million in damages from her Puerto Rico bond investments. It sort of seems like a slam dunk win. Then again, wasn't that how the bonds were marketed?
Conventional wisdom says our retirement income be about 70% of our pre-retirement income. More recent research suggests that, with increasing health costs and all of us living longer, we need at least 130%. When I was working with wealth advisers at a big wire house, we thought "The Number" -- the net worth needed to fund an affluent retirement -- was about $4 million. With social security benefits included, and even at today's abysmally low interest rates, that still seems like it would maintain a $150,000 pre-retirement income lifestyle for about 30 years. The median pre-retirement income of the middle-middle-class is less, about $65,000, and to maintain that lifestyle over a 30-year retirement requires about $1.5 million.
Usually, a FINRA Arbitration involves a public customer's allegation about a stockbroker's failure to do something -- as in failing to enter my order, or failing to recommend a suitable investment, or failing to get my authorization to buy or sell. In today's Blog, we have a customer alleging that her stockbroker forced her to enter a Stop Loss order, which is typically utilized to protect against loss. As such, the lawsuit is not about a failure to do something but about something that got done. Now, don't get me wrong, there could be circumstances where a stockbroker over-reaches and effectively takes control of a customer's account. It happens. In such circumstances, you might argue that a stockbroker "forced" a transaction onto a defenseless customer. There's precedence for that. On the other hand, if a customer hasn't surrendered control of her account and she is aware that a Stop Loss order is active, then that customer can (should) cancel the order before the stop is activated and a sale occurs. What you can't do, however, is have it both ways. You can't keep the downside protection in place and then complain about it if your shares are sold. You know what . . . let me rephrase that, you can always complain about anything, and all the more so if you want to hire and lawyer and pay that advocate by the hour. Consider today's public customer arbitration.

10 Years After, World Is Changed For Ameriprise Stockbroker In FINRA Expungement ( Blog)
I'd love to change the world. The question is where to start. Take Wall Street, for example, where the overwhelming majority of customer complaints strike me as meritorious. On the other hand, after nearly four decades on the Street, I have concluded that the overwhelming majority of stockbrokers are honest, decent men and women. It is a continual battle reconciling my sense that most complaining customers are frequently right with the fact that many stockbrokers named in complaints are innocent of the alleged misconduct. In order to balance out those different aspects, it often turns out that in a given customer dispute, the employing brokerage firm is solely at fault rather than the individual associated person, or, a given product was toxic and the flaw hidden from the stockbroker; or, losses were sustained not from misconduct but from the vagaries of the markets involved. In trying to establish equilibrium, I also must accept the fact that some customers are full of crap and are merely trying to avoid losses and some stockbrokers are full of crap and are merely doing whatever it takes to make a sale. Pick any industry where there are customer relationships, however, and you'll likely find the same dynamic. It's not just Wall Street. When the two worlds of unhappy customers and indignant stockbrokers collide, justice may prove elusive. Biases and memories being what they are, we tend to err on the side of the customer who lost money -- I got no problem with that. Seems fair but to a point. In today's Blog we come to just such a point. After a decade of apparent injustice, a stockbroker asks to have his records scrubbed clean. Ten years later, he asks to have his world changed  -- hmmm, wasn't there a rock band and song . . . and what was their name . . . and what was the song's title???