[T]he causes of action relate to Claimants alleging that Respondent: failed to maintain an adequate infrastructure and trading platform; prevented Claimants from entering orders to sell Claimants' entire GameStop Corporation ("GME") position; failed to timely place Claimants' trades; did not provide proper support and resources; did not have an adequate risk management system or controls in place; and did not satisfy industry standards.
Also, read about "operational capacity" and trading-platform issues in: "A History Of SOES, Daytrading, NASD, NASDAQ, DOJ, SEC, Congress, And Robinhood -- And A Massachusetts Complaint And Another FINRA Fine" (BrokeAndBroker.com Blog / December 17, 2020)This case highlights issues that are not unique to Schwab but have become common occurrences among brokerage firms that offer so-called discount, online trading. In this age of zero-commission-day-trading, operational capacity is an issue that has stepped to the forefront. Each day, when customers log on to their accounts, they are immediately confronted with warnings about unprecedented trading volume, brokerage employees working remote, and all sorts of indications about why the brokerage firm may not be able to timely execute an order or timely confirm same or timely update your buying power or timely disclose your current positions. Sure, go ahead and trade blindfolded!Frankly, that's just not acceptable. Worse, Wall Street's regulatory community is all too aware of the operational capacity stresses among the industry's key retail players; however, rather than act decisively, the industry's regulators prefer to fall back to their same old, tired reactions. They issue notices reminding broker-dealers to remain compliant. They post purported consumer warnings about the risks of trading. They produce podcasts and videos. What doesn't come from Wall Street's regulatory community are solutions.What would some meaningful solutions look like? For starters:
- restrict a firm from opening more retail accounts until it invests sufficient cash and human assets into its trading platform and operational capacity;
- require X number of customer service reps per Y number of customers;
- monitor the delays between a customer phoning a firm's customer service and the time it takes for that call to be handled -- and NOT ending with the time the call is "picked up" but immediately put on further hold;
- monitor the level of traffic coming into a firm's online helpline and chat features to detect growing issues;
- monitor online communities and websites that report about brokerage firm outages;
- require firms to post weekly statistics about the time to answer an average customer request for help or to file a dispute about a trade-related issue;
- promulgate fixed guidelines as to when a delayed response to a customer trading complaint/query is not timely and constitutes conduct inconsistent with just and equitable principles of trade; and
- require firms to fully and timely repay all customer losses related to platform or operational capacity issues.