A FINRA arbitrator in Jackson, Mississippi, has found E*Trade Securities LLC liable for failing to execute a trade properly and ordered the online brokerage firm to pay its customer over $31,000 (the “Award”).
According to the Award, the customer, Mr. David White, filed a claim against E*Trade in early February 2021, alleging that the firm failed to execute his order at the original limit price, not the higher trading price that the option was priced at the time.
E*Trade was also ordered to pay interest on the $31,150 in compensatory damages at a rate of 8% per annum from January 27, 2021, until the date of payment of the Award.
The start date of the interest award is interesting as it coincides with the week that brokerage firms like E*Trade, Robinhood, and Webull began to restrict trading in “meme stocks” such as GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR). Generally, in a FINRA arbitration proceeding, an award for interest corresponds with the date that the investor was harmed.
Although the Award does not specify what security gave rise to the dispute, Mr. White’s arbitration award may be the first arbitration award related to “meme stocks.”
This blog has previously written about the conduct of brokerage firms during the week of January 25, 2021, concerning “meme stocks”: Retail Investors Fight Back Against Robinhood for Its January 28, 2021, Trading Restrictions on “Meme Stocks,” Such as GameStop, AMC, Koss Corporation, and Express, Inc.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.