The Securities Litigation Expert Blog

A Fiduciary Standard for Brokers?

Posted by Jack Duval

Feb 12, 2013 3:06:00 AM

This blog post continues our expert analysis of complex investments and their regulation.

Thompson-Reuters has a brief interview with legal scholar Tamar Frankel addressing the different standards of care for brokerage customers.  (TR)

Here's a quote:

Q: Can you really apply a fiduciary standard to Wall Street?

A: I think so. It will help to show who is a real salesman and who is a person who sells something but also has advice. Brokerage customers are not always in the position to make that distinction. For example, when I buy a dress and the saleswoman tells me that I look beautiful, I can judge for myself if that's true because I can look in a mirror and see I'm fat. But if a doctor or lawyer says the best thing for you is to have heart surgery or go to court, I have no idea about whether that advice is for my benefit.




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Topics: FINRA, RIA, Thompson Reuters, Fiduciary, Investment Advisors, litigation, SEC, Tamar Frankel, Compliance, regulation., Complexity

New York State Court (Can't?) Won't Enforce Finra Arbitration Award

Posted by Jack Duval

Dec 3, 2012 3:20:23 PM

Thompson Reuter is reporting that a New York State judge won't enforce a Finra Arbitration Award, stating that only a Federal Court can do that. (TR)  Here's your money quote:

The judge said the arbitration award in this case did not "expressly state which of the causes of action were sustained in finding" for Copperill, a customer of Westrock and Sloane. However, he said Copperill's claims, including unsuitable investing and breach of fiduciary duty, were Securities Exchange Act violations.

"Since the arbitration award is based upon liability created by the Securities Exchange Act, the court is without subject-matter jurisdiction to enforce the award," Bucaria wrote.

I'm not a lawyer, but it seems to me that New York State has its own set of securities laws.
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Topics: FINRA, Thompson Reuters, New York State, litigation, SEC

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