Whoops - Damn

Recently I received word that an arbitration panel rendered a multimillion dollar award in favor of the side that called me as an expert witness.  The chief issue was suitability and all of the facets of this subject.  I won't go into the details but will lay out the NASD/FINRA NTM's (Notice to Members) I discussed in my testimony. They are: NTM numbers: 96-60, 03-07, 03-71, 04-30, 05-18, 05-26, 05-59, 07-43, 08-81, 09-25, 09-73 and 10-09. I make the following Observation:

Suitability

Sometimes insufficient attention is given to the "reasonable basis" process of FINRA's suitability rule. This can lead to disastrous consequences.  With that in mind I thought I might tweak and republish an earlier Observation.

·        Whoops - Damn

People generally don’t start out with the intention of creating the potential for a big problem or for that matter undertaking a risk that if realized would have a significant consequence.  They cut a corner here and then later cut a corner there and so on and one day they wake up and …. 

                     - 01/23/2007 

Update:  As we can see from the Gulf Disaster things can get out of hand.

-0715/2010