November 12, 2022
In today's featured FINRA arbitration, we got an investment banking dispute involving a breach of contract. Added into that mix, we got an inaccurate Form ADV. Frankly, there's a whole lot of nothing and a little bit of something swirling around here, but the Claimant's lawyer seems to have grabbed the arbitrators' attention and made a point. And that point rang up the proverbial cash register in Claimant's favor. In the end, the FINRA Arbitration Panel seems perturbed by Respondents' "inattentiveness" and hit them with a fee that isn't often awarded in full.
A lowly pro se Claimant took on one of FINRA's Big Boys in an arbitration seeking less than $9,000 in alleged damages. Why didn't TD Ameritrade just settle the damn lawsuit and be done with it? I don't know and the FINRA Award doesn't explain. Another thing left unanswered is why the winning customer got about half of what he asked for, why he was allegedly forced to liquidate his account, and why FINRA imposed fees upon this victorious small fry.
Among Henry David Thoreau's more memorable quotes is this one: "Any fool can make a rule, and any fool will mind it." Which brings me to the issue of Securities and Exchange Commission ("SEC") Chair Gary Gensler's ambitious rule-proposal agenda. Many Wall Street stakeholders fear that the large number of proposals has become excessive. There is reach. There is grasp. Our reach exceeds our grasp. I wonder whether SEC Chair Gensler has stretched out his fingers and then retracted them in order to confirm that truth.