Still Daytrading?

Q. I am a daytrader. I trade stocks for a living. I recently had a problem with a trade and I reported it to the SEC. I trade with an on line broker. The broker closed my account. They did this without warning. In the agreement they state they can close my account at any time for any reason. But it does not say without a warning. I did nothing wrong except use about the only tool I have to complain - the SEC. I spoke with the broker but he said too bad nothing they will do about it. The SEC asked for a response but they say they can't do anything about it. In the meantime I have no income till I transfer which I have already got started.

Do you think I have a case? - Thanks.


A. The question "Do I have a case?" is always difficult to answer, especially when I am faced with limited facts. In this litigious age, it seems that everyone is happy to sue anyone for anything. The question really is do you have a case that has a reasonable chance of success (not that that question is any easier to answer).

You state that you had "problems" with a trade but do not tell me what kind of problems. Did the trade go through? Was it delayed? Was it placed incorrectly? Or were the problems more personal? You didn't like the way the broker talked to you, or the advice he gave you? There's a big difference in these types of "problems." If the broker violated some aspect of your user agreement by not placing the trade, or not placing it quickly enough, you may have the basis for a claim. On the other hand, if you and the broker had a clash of personalities, that's one of those "get over it and move on" moments that we, as functioning adults in a civilized society must learn to deal with.

You also state that you reported the problems to the SEC. That strikes me as a pretty big leap. Did you attempt to work it out with the company first? If not, why not? And what, precisely, did you report? I infer from your statement that you believe that the company, or the broker, violated some securities law. That's a pretty big charge, but if it's true, there may be a basis for a claim there as well.

I'm not trying to elicit additional information. I am, however, trying to frame some of the issues that any attorney will raise with you as you try to find out if you have "a case."

I am only speculating here, but if you didn't attempt to work out your problems with the broker, or allow them the opportunity to work it out for you, that may have been the basis for the termination of your account.

If the terms of your agreement permit termination of your account for any reason, or for no reason, it is likely that the agreement would also permit termination without notice as well.

Finally, there is the question of your damages. Even if you have the basis of a claim on some theoretical level, what damage was done to you? Did you lose money and, more importantly, can you document the amount you lost? Can you prove your damages? If you can't prove damage, what do you hope to recover?

Off the top of my head, and from the limited information you gave me, it appears that any claim you have would be shaky, at best. The broker was probably within its rights to terminate your account. I don't see any damages to you, based on what you're telling me. You're moving your account to another broker, and you don't indicate how you were damaged, if at all.

Nevertheless, it certainly wouldn't hurt to consult with an attorney experienced in SEC law, or commodities trading. Just make sure you've got answers to all these questions, and keep in mind the issues I mentioned above. You can get a referral to an appropriate attorney from your local bar association.

David Kendall

Splitting Lanes -- Do You Feel Lucky?

Q. I'm a member of . . . a nationwide association of motorcycling entheusists [sic]. In recent weeks the topic of splitting lanes has come up. This is the practice of driving between two lanes of slow moving or stopped traffic on a highway. Our California membership claims that it is not illegal in their state and typically done by CHP officers. Members in FL, IL, AZ, NM, LA & OH also claim they haven't been cited for doing so, after many years of riding. Obviously, the tri-state membership is wondering if this practice is forbidden in our area. I've searched through the NJ Statutes and frankly can't find a definative [sic] answer. Please help.

Thank you.



A. Well, as your question suggests, each state makes its own laws regarding things like traffic offenses. What may be legal in one state can be illegal in another state. Speed limits are but one example. I know that I can drive from New Jersey to North Carolina and face at least 4 different speed limits.

The beauty of traffic laws is that they don't necessarily have to specifically define an offense to make it illegal. If your action violates some provision of an existing law, the statutes don't have to outlaw "splitting lanes" as well.

I'm 95% sure that there is no statute in New Jersey that uses the phrase "splitting lanes" to prohibit the conduct you're describing. However, I know that New Jersey (and many other states) do make it an offense if you "fail to maintain your lane." I betcha a police officer would also write you up for careless operation, and, if the officer was in a really foul mood, maybe even failure to obey a traffic control device (such as the lane markers).

There's another aspect of the practice of "splitting lanes" that you should consider as well. That's good ole common sense. I mean, don't you think it's inherently dangerous to drive between two lanes of traffic on the highway? Hello -- haven't you ever seen people switch lanes on a dime while sitting in traffic? Wouldn't that render you and your motorcycle so much scrap metal and burned flesh? Plus, in this era of "road rage," aren't you just asking for trouble? Can't you see some hot head watching you jump the line and, in a fit of anger, give you a little love tap at the next light?

Seriously, if you need to get there so quickly, maybe you should leave five minutes earlier.

Good luck, and let's be careful out there.

David Kendall

Can We Leave Yet?

Q. My husband and I are good hard working people that happened to live in a slum. The neighbors are low life drug dealing psychopathic freaks. The managers are a young couple (21 and 23) and they thrive on intimidating people and having drunken screaming matches in front of my kid's bedroom window. We made the decision just last week to get the heck out of here, and have found a much nicer apartment without all the crap, and will be moving in on the first of November. We never signed a lease or month to month rental agreement for this year, nor have we exchanged any verbal agreements with the resident managers or the owners. We simply pay the rent. Are we obligated to give any amount of notice of our move?

A. Based on everything you're telling me, because you don't have a written lease, usually the law presumes that you have a month-to-month tenancy, which you can usually end on thirty-days' notice. (I say "usually" because every state is different, and Wisconsin may have slightly different rules about this. You might want to check this out, either in a local law library, or with an attorney from Legal Aid. Most states have them.) However, assuming Wisconsin is a "month-to-month" state, if you were planning on leaving on November 1, you would usually give notice on October 1.

Of course, I'm guessing your concern is what the managers' reaction will be, and what they might do. You can always give notice on November 1 for a December 1 end date, and then tell the landlord to apply your security deposit to the last month's rent. Sure, you're out your security deposit, but it may be that your piece of mind is worth that. (But note, just like with the month-to-month rules, Wisconsin may have rules about how you can use a security deposit when it comes to the last month's rent.)

Now, if you didn't post a security deposit, you can STILL move out on November 1, without giving any notice at all. Ordinarily, the most you would be liable for is the rent for the month of November (since you've only got a month-to-month lease). The landlord has a duty to mitigate (lessen) his damages, which means he can't just leave your apartment empty in the hope of collecting rent he claims you should have paid. He has to make an honest effort to rent the apartment out at the market rate. If the apartment is easily rentable, you'd probably only face one month's rental, at most (the month you didn't give him notice for [November]). (But, as above, you might want to raise all this questions with a local attorney, admitted to practice in Wisconsin [which I am not] to address these, and any related questions, you might have.)

One more thought occurred to me. If you have access to a video camera, do a walk-through of the apartment just before you leave, taping as you go. Make sure the date shows on the tape as you do. That way, you can document the condition of the apartment in case that ever becomes an issue. That technique has come in handy for friends and acquaintances over the years.

Best of luck to you, and I'm happy that you've got a nice opportunity in front of you!

Here’s the follow-up from the questioner, which is always nice to have:

Thanks so much for your speedy response - I imagine it is going to be an up-hill battle simply because there will be a total of 7 of 16 units open in this complex at the end of the month due to poor management. Three have been open over the course of the last 5 months, and they still haven't been able to fill them, and the only people that will be left after we leave are drug dealers and alcoholics. I have already kissed my security deposit goodbye simply because they will be desperate to keep as much $$ as they can. It's a mess. I will be sending them a letter, though it will be short notice, but I think I will also send a report from the police department for every call to this complex in the last 6 months. I doubt that will keep them from hauling me into small claims court, but with luck the judge will see my point. I will certainly contact an attorney as you suggested just to see what's up with Wisconsin law.

Thanks again.

The Rules, The Disclaimer, and other legalese

Let’s get some rules out of the way to protect both you and me. As you can see, this is a public forum, and we’re all just hanging out here, shooting the breeze. My answers are for fun, information, and entertainment as I give you some general information that may, or may not, help you out.

Nothing in this blog, or my askalawyer website, is intended to be “legal advice.” Contacting me via email, post, message board, or other means that link you here does not create an attorney-client privilege or an attorney-client relationship.

Any question you send may be posted for the world to see and answered in my blog, on my website, or elsewhere. I won’t use names or addresses in any post, but your questions to me are not private, privileged, or confidential.

What all this mean is that I AM NOT your lawyer and you shouldn’t consider me your lawyer. By sending me an email and asking me a question, you acknowledge that you understand all of this, are agreeing with all of this, and are waiving the right to complain about any of this after the fact.

You shouldn’t use my answers as a substitute for your own lawyer. Under the guidelines set out by the various Bar Associations, and according to the ethical obligations imposed on attorneys (yes, we do have a few!), and mostly because I want you to know that you do not have a cause of action against me if you don't like my answers, I cannot, and am not intending to, advise you as in a "lawyer-client relationship."

I will apply general legal concepts to your questions, but remember, because the laws vary from state to state (and country to country -- this IS the Internet, after all) you should take what I say with a grain of salt.

Also remember that I'm not up there on the top shelves, pulling down the dusty law books and doing in-depth research to answer your questions. All I'm doing here is shooting from the hip with a quick answer that, with luck, will help you out a bit. Or not.

Warning: I cannot guarantee that I will be able to respond to your questions. I am ridiculously far behind in answering questions that people have been kind enough to send me over the years. My hope for this blog is that I will be able to catch up some. However, I get bunches of questions and it takes time to sift through them and get answers out. I have been trying to answer them all, but it ain't easy, folks, so bear with me. Hey, it's hard work being lawyer-like AND entertaining (which is half the fun of doing this)!

I used to believe that I would be able to personally answer all of your questions but experience tells me that that ain’t happening anytime soon, so just bear with me. I’ll try to answer your question as quickly as I can. If you don’t get an answer, it doesn’t mean that your question was bad, or I didn’t know the answer. All it means is I haven’t yet gotten to it. I will post some of the more entertaining questions and answers here for your reading enjoyment -- and to help folks with similar problems.

Finally, if you have an urgent matter (like you're sitting in a county lock-up somewhere, waiting for bail money, or you have a court date tomorrow), or if you already believe that you need a lawyer, do not waste time e-mailing questions to me and waiting for an answer! Go get your own lawyer! God only knows when I'll get through my e-mail to find your question, and you don't want to be stuck waiting for an answer here which may or may not help you. If you need action now, take action now.

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Ask A Lawyer's New Home

Well, once we get this up and running, I suspect that it will be much easier to run the Ask A Lawyer show from here. Keep your eyes peeled, and we'll get the postings going soon.