When I started out in this business, I represented investors against brokers and the investor was always right.
Then I got wise. Especially as the market did well in the early 2010s, there were a lot of shifty investors trying to get a Mulligan if their bad ideas didn’t pan out. And blame the broker!
But there is a solution to every problem. In these situations, it comes in the form of thousands of emails sent by a bad client hell bent on sticking it to the broker and his or her firm. In most of these cases, such chicanery is exposed to the light – and the FINRA arbitration panel – and the schlub loses. And I win, and so does the broker.
What happens before these folks become your client and after they move on to the next poor sap who handles their account is of equal importance in these cases to what happened on your watch. If the FINRA panel will review that, you have a much better chance of winning your case. If they will not, look out!
Case in point, a Dallas investor who I will call “Larry,” who sued Oppenheimer – twice! – and then, went after Chase. In our first case, LNR1, we had some 3,000 emails in which Larry hemmed and hawed and crabbed and abused his brokers the whole time he was with the firm, showing them who was large and in charge. He demanded nearly a million from the firm, but all he got was $75k in attorney’s fees. Most of the brokers involved got their records expunged. Apparently, this guy’s lawyer would not take the case on contingency. Smart man. Smarter than his client.
Why did we win? Because Larry’s emails did him in. And this investor’s history at his previous brokerage showed patterns and habits of investing and communicating with his brokers that he repeated at Oppenheimer.
Somehow, Larry forgot to go after damages for a few trust accounts in the first case, so he launched another, LNR2. Same case, same story, same B.S. But, in this one, the FINRA panel chair, who gave us discovery relating to Larry’s investment habits at his new firm post-Oppenheimer, was replaced at the last minute by a cram down. The first day of trial, this dude announced that what happened before Oppenheimer and afterwards were of no concern to him. We lost that one.
Then, unsatisfied with squeezing a few bucks out of Oppenheimer, Larry went after J.P. Morgan Securities, Inc. Same case again, same story, same B.S. Again. But this time, in a case I call LNR3, the defense counsel had not only Larry’s pre-Oppenheimer history, but the history of his antics at Oppenheimer and sunk his case. Discovery is a bitch.
Sorry, Larry. One out of three ain’t bad.
