At the same time its web site was crashing on 4/20, Schwab was receiving an award at Comdex for helping make online stock trading "inexpensive and easy."
From an article written by Stewart Deck in
Internet News, 4/21/98
in the online Computerworld
www2.computerworld.com
"Schwab wins one, loses one"
"Yesterday, as Charles Schwab & Co. was honored for its World Wide Web site, the same site and the stock trader's telephone service crashed for two hours, leaving traders unable to make stock deals unless they did it the old-fashioned way."
"Schwab was presented with a Global Infrastructure Commerce Award at the Comdex/Spring '98 computer trade show in Chicago yesterday for helping make online stock trading inexpensive and easy."
"But on the same day that Schwab was accepting the praise, its customers were left unconnected from 9:45 a.m. until 11:45 a.m. EDT, unable to make stock trades via the company's Web site or through Schwab's automated Touch-Tone telephone service."
"Schwab employees were also unable to look up user accounts or gather stock information from the firm's network. Customers were able to conduct trading chores in person in Schwab offices or by phone with live operators."
"Tom Taggart, a Schwab spokesman, said the network trouble was caused by the crash of a central hub, but no further details were available by deadline."
___________________________________________
Inexpensive??? Easy???? Who would pick Schwab for that category?
A prize in the Winners Category???
Only two hours?? if the orders had been placed on the backup system, they could not be accessed until after the market closed.
If there was a trade....from an article written 10/29/97
Message 2579715
"Rule 10b-5 (the
antifraud provision of federal securities law) does
not permit antifraud suites on the basis of claims
that an investor would have done this or that. This is
the kind of context where people have a tendency to
fabricate the extent of the trade they wanted to make.
"So there must have been an actual trade."
Here are some contacts if you want to file complaints:
Office of Investor Education and Assistance
Securities and Exchange Commission
Washington, DC 20549
You should also contact your local NASD office. To
locate it, call 800-289 9999, or visit the NASD
website (www.nasdr.
"The brokerage has an obligation to have reasonable
facilities," agrees Stephen Friedman, a securities
lawyer with Debevoise & Plimpton in New York. "And
there are times when those facilities don't give you
what you want. But I don't think it is negligence or
breach of fiduciary duty. It is a question of what is
reasonably foreseeable and what level of facilities
you have to maintain. If they have acted recklessly,
then there may be the beginnings of something. But
that is going to be hard to show"
Nevertheless, investors who are peeved about missed
profits may find that the most productive thing to do
is complain. "This could be a basis on which broker
dealers could be disciplined either by stock exchanges
or by the NASD," explains John Coffee, an expert in
securities law who teaches at Columbia University law
school. As "self regulatory organizations," the NASD
and the stock exchanges have the duty of regulating
many activities of the market. NASD, for example,
handles complaints about brokers.
The SEC, which oversees the NASD and the exchanges,
also responds to complaints about brokers. "We suggest
people put their complaint in writing, address it to
the compliance officer at the firm and send copies to
the SEC, NASD, and possibly the state regulator," says
an SEC spokesman (for addresses, see below).
Angry investors who still want to go the legal route
should keep the following points in mind:
* Under the so-called "shingle theory" in law, anyone
who hangs a shingle out advertising services implies
that they maintain industry standards. Along those
lines, the NASD, which regulates brokers, requires
that they follow "just and equitable principles of
trade." In essence, brokers are not allowed to
deviate from industry standards. "But you will only
win if there was a clear departure from established
norms," says Coffee. Investors can call the NASD at
212-858-4400 for the information and forms needed to
file to begin an arbitration proceeding.
* You have no recourse under federal antifraud
provisions set up by national securities laws. "The
problem is that there is no way to prove the amount of
the losses," explains Coffee. "Rule 10b-5 (the
antifraud provision of federal securities law) does
not permit antifraud suites on the basis of claims
that an investor would have done this or that. This is
the kind of context where people have a tendency to
fabricate the extent of the trade they wanted to make.
So there must have been an actual trade."
"Here are some contacts if you want to file complaints:
Office of Investor Education and Assistance
Securities and Exchange Commission
Washington, DC 20549
You should also contact your local NASD office. To
locate it, call 800-289 9999, or visit the NASD
website (www.nasdr.com)"
ÿ
|
