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
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
posted by David Kendall at
11:28 PM
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