Conference nyoss1::market_investing

299.0. "Consumer vs. Broker: What are my rights?" by ASDG::MISTRY () Thu Oct 22 1992 19:21

    
    
    Here is a question on consumer rights for you guys:
    
    In the early summer of 1991, I purchased 400 shares of a stock traded 
    on the NASDAQ exchange, through a broker and on his advice. The purchase
    price was approx. $2.50 per share.
    
    As of December 1991, it was trading at close to $5/share.  
    
    I planned to be out of the country for 8-9 months starting late
    december, so I called my broker and asked him to do a limit sale, i.e.
    sell if the stock went below $4.00 or if it went above $6.00  As *I*
    recall, he accepted those instructions without demur.
    
    As it happened, the stock went above $6 and stayed there for a few
    days, and then went down and is now trading at $2.75/share.
    
    After I got back states-side, I read my balance statements that showed 
    that I still owned the shares, double checked the history of the share 
    value vs. time, and then called my broker to ask why the sale had not 
    been executed.  This is what he had to say:
    
    		(i) He was sorry
    
    		(ii) That limit sale orders were not accepted on the 
    		     NASDAQ exchange.
    
    		(iii) That he had told me about (ii) but had promised to
    		     try to execute the sale himself as he tracked prices.
    
                (iv) That he had been out the week the stock was above $6.
    
    		(v) That his firm did not record conversations, so I could
    		     not verify whether his recollection or mine was correct.   
    
    What can you experienced folks out there tell me about
    	(a) my rights: I know I can ask to speak to his office manager, but
            beyond that?
    
        (b) What can you tell me about the rules regarding limit sales on the
            NASDAQ?
    
    Thanks,
    
    Kaizad

If nothing else, you've learned a lesson:  Put your instructions in
writing!

This is especially true when you will be incommunicado for a lengthy
time period and cannot check on whether those instructions are carried
out.

~K.

    In this case you should have had a good till cancvel order at $6 and
    instruction to change it to market when it went below $4.  Your broker
    should have been smart enough to do this. 
    
    Jessie

    
    
    Jessie,
    
    That is a good idea.  I should have thought of that myself.
    However, since the broker didn't object to taking a limit order,
    I assumed all was ok.  
    
    Re. -2
    
    Written instrcutions:  your point did not escape me.
    
    Kaizad