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Chase Investment Services showed "colossal lack of foresight and attention"

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Mar 18, 2011 7:49 pm

A breathtaking FINRA Arbitration Decision -- among the best that I have read in some three decades on Wall Street.  Having chaired many arbitration panels and having served as a panelist on even more, I know that the overwhelming majority of arbitrators are dedicated men and women who render a valuable service to the public.  Unfortunately, FINRA does not require a comprehensive Decision in all cases and, as such, we are often left to wonder how cases were decided and why. 

In this case, the sole Arbitrator dissected the evidence. Not only did he refuse to sanction the stockbroker, but the Arbitrator made it clear that Respondent CISC's questionable policies and practices set a cascade of misconduct into play -- and that the stockbroker justifiably relied upon his firm's apparent assurances.  However, the Claimants were not fully exonerated.  To the contrary, the Arbitrator chided the Toscanos for not doing their own due diligence and failing to undertake a minimal level of responsibility for their investments.  In truth, sometimes there is blame enough to be shared between the brokerage firm and its customers.


Mar 18, 2011 8:07 pm

Bill, good to see you posting.

Chase and other banks are more than likely going to make serious changes to their operations. Brokers better be aware of that.

Like always, there will be additional requirements, risks, all at the expense of the rep.