Blog by Bill Singer Esq WEEK IN REVIEW

June 15, 2019
In a recent FINRA arbitration expungement case involving UBS, we come across an example of nonsensical regulation. To give you a sense of how stupid stupid can get -- look around and pick someone, anyone, in your field of view. Okay, fine, so let's go with that woman you picked. I will tell you that she has NEVER owned a single share of stock -- you got that? Now, see if you can answer this question: If the woman you picked were to file a lawsuit against a brokerage firm for losses in her account, what stocks do you think she would have bought and how large would her losses have been?
Our experience with Artificial Intelligence is so new and so counterintuitive that it plays havoc with our common sense. We feel that need to hold some human responsible for things that go wrong. We can't quite yet live with the possibility that the machine just fucked up. But who to sue can be elusive.
In a recent FINRA customer arbitration, the public customer Claimants were looking for millions in damages as a result of alleged losses from their investments in Comerica Asset Management products. In filing their Statement of Claim, the customers named Comerica Securities, Inc. as the one and only Respondent. After all, you'd sorta think that Comerica is Comerica is Comerica, right? Well, in reality, no.
Two public customers complained about the conduct of their stockbroker. He denied the charges. A FINRA Arbitration Panel of three public arbitrators dismissed the claims. Thereafter, two of the arbitrators recommended expungement. The third didn't agree. To her credit, the Dissent sure as hell stood her ground -- although some might argue she was standing on legal quicksand.
If a tree falls in the woods but no one hears it, does it make a sound? If a customer sends an order to buy mutual funds via email but the stockbroker doesn't get the message, was there a bona fide order?  Welcome to the fun world of regulation, compliance, and arbitration on Wall Street.