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Technology Stocks : SYQUEST
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To: RagTimeBand who wrote (5804)3/9/1998 4:43:00 PM
From: Arrow Hd.  Read Replies (1) of 7685
 
Emory, thanks for the note. An unsolicited order is when a customer
is managing his/her own portfolio and the idea to buy SYQT is their
own not a brokerage firm or broker's recommendation. Sometimes the
trade confirmation has "unsolicited" printed on it. This way if the
trade is unprofitable the customer has less recourse to sue or go to
arbitration because the decision to buy SYQT was strictly their own.
Even at that there is some level of responsibility to advise the
customer on what should be prudent investing. So an unsolicited
order where the majority of the portfolio is in one stock could still
be brought into question if the customer lost money. In other words,
the broker did not provide adequate cautionary advice and guidance.
If a single broker had a series of customers all buy SYQT and the
broker claimed they were unsolicited the firm may not believe that
this is true. So they tell him not to do any more since they really
believe that the broker is out there soliciting the business. So the
broker is cut off from accepting any additional orders for SYQT from
any account he/she covers. Even if it is in the street name and has
cleared (paid for) the possibility that a stock like SYQT with their
financial problems could go Chapter 11 or worse which means that it
could drop to a price somewhat below book value if there is one at
all after factoring in liabilities. Thats when a broker runs the risk
of getting sued for bad judgement whether merited or not. So even
unsolicited orders come into question so major brokerage firms watch
for situations where they have too many customers owning too much of a
volatile or dicey stock and at some point put curbs on trading and/or
taking orders for this issue since it exacerbates the potential
liability. The point I was on with this is that there may be many
brokers out there that would love to go to their client base that
invests in technology and push SYQT based upon the new product and its
publicity but are either discouraged from doing so or flat out told
not to solicit this business. That eliminates potential buy side
volume which doesnt help the cause of those who have long positions.
Of course, this is all dependent upon the business practices of each
brokerage firm. My comments are really regarding the bigger retail
firms. Smaller firms may take more risk. On-line trading outfits
may not care, and so on. It is a generalization and nothing more but
the comments that I made were based upon specific situations that
have happened in the past few weeks with one particular firm which
I should not mention.
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