Can Etrade be held liable?
- Thread starter kizzy
- Start date
Here is what you wrote that led to my conclusions:
...whereas, if in your scenario re the horse breaking its leg, if the racetrack knew that the horse was actually likely to break its leg during a race, I actually would have a legal claim for recovery based on negligent or intentional misrepresentation.
My supposition would be that it would be negligent to let any horses run on a sub-standard track surface that could very likely and very predictably lead to an injury.
I must have missed this information:
..However, in my original scenario, the track is dry, the weather is clear, and the horse looks great to the untrained and even the educated eye, but the racetrack KNOWS with near certainty that the horse will break its leg.
Using this analogy, I'm not sure how a brokerage firm is supposed to ascertain all those things about a potential customer OR the market he/she hopes to trade. But I suppose we are beating a dead horse here since we can't seem to agree on much.
You also did not answer my question as to who does the studies that claim the statistics you wish to be disclosed?
I would really like to know if my broker does these studies on their customers. Yours is the first I've read it mentioned that they should disclose this type of information and I'm not certain they have it to disclose.
If they do such studies, I wonder if a claim could be made against them for using my statistics without my permission. Or maybe I should get paid for being part of a study... or maybe I should just sue their asses off because they are using my data without my permission from a study I didn't agree to be part of in the first place..
If they did such studies they would most likely require me to agree to be part of the study and let them use my data for free. I would likely be required to sign a disclosure form stating that I understood all the implications of being in the study and sharing my data. I could later sue them because I didn't really understand the implications at all and they should have made damn sure I understood better before they let me throw my data away like that! Sharing my data probably caused me to lose all my money too. That might be a bit of a stretch but I'm sure given enough time and money, I could figure out a plausible scenario where it was true.
What a useless thing to debate! Lol..
Exactly. Kizzy shouldn't be permitted to trade, because he is actually likely to break his leg, and the brokerage knows this. If you put 100 horses on a race track and run them, it is more likely than not that all of them will reach the finish line without a serious injury.
If you put 100 traders into the market and let them trade, it is likely that almost every one of them will be injured.
If the situation were reversed, and the horse owners knew the odds, then none of the horse owners would run their horses on the track.
Same goes for the trader. I'm not sure why you choose to not see the obvious, but it really doesn't matter to me. I know how to keep my own horse from breaking my leg, however someone asked me what I would suggest to keep people like kizzy from breaking their leg, and my answer is full disclosure.
As for your suggestion re providing statistics, such calculations would be trivial obtain, and it would be based upon the aggregate numbers. No confidential info would be identifiable in any meaningful way, only the statistical performance, i.e., expected value, standard devation, % winning accounts v. losers, average return, etc.
Re the licensing of the info, the brokerages could simply make this statistical disclosure a requirement for anyone who opens an account. No release
Have you ever seen any performance measurement provided by anyone in the industry? Of course not. And you never will.
Full disclosure would have done absolutely nothing to help kizzy. It wasn't an accident that he traded with money he did not own. He knew it from the beginning and did not care that the funds were not his to use.
Bottom line for me is if you open a brokerage account, and acknowledge all the disclosures, then you are responsible for your trading behavior. No amount of disclosure would change that. Just as no amount of disclosure will stop a gambler from throwing the dice.
I also see that we will never agree on the subject so I suppose it's time to move on. It has been a pleasure debating with you.
Cheers,
BD
You keep trying to end the thread after you get the last word in. Simultaneously, you seem bent upon demonstrating the absurdity of my comments. So, I will defend my position again.
1. You state that full disclosure would not have prevented kizzy from trading, as if you know it for a fact. You don't. If a brokerage were to tell kizzy that he is practically certain to lose money if he invests it with them, and that they will aggressively attempt to beat him, and that they will provide statistics showing just exactly how difficult it is for kizzy to beat them, then perhaps kizzy would abstain from trading. I'll bet that he would, or at least that he would be extremely wary of how much money he would put at risk.
2. You also suggest that it is impossible to determine if a person is "fit" to trade (thereby analogizing my horse who is nearly certain to break a leg). This statement is quite silly. Brokers must get a license before they can work in the industry. Don Bright won't let you trade in his firm unless you've got a license. He requires a minimum competency level.
3. I suggest that day trading authority could be restricted to those who have have a demonstrable minimum compentency level (i.e., a license). This doesn't mean that people can't invest without a license. It merely protects people from being fleeced by an industry that has set up a system to trap unwarely retail investors.
4. I have no problem with someone like "mschey," for example, who trades huge volumes of shares, and who has a license, and who knows exactly what he's up against. He makes a living trading (at least, apparently). But, for the average retail trader, the market, and ESPECIALLY the futures and options market is a graveyard. Everyone in the investment industry is aligned to take that person's money from him/her. Everything is misleading -- the books, the radio/tv shows -- everything.
5. Losing your ass in the market while being led to believe that you will not lose your ass, is fraud -- nothing less. You may find this amusing and demand personal responsibility.
6. The law, however, deals with assumption of risk by only indulging it when the party who assumes the risk has had a reasonable opportunity to contemplate that risk in advance. Otherwise, a contract whereby a person assumes the risk of his or her acts will usually not be enforced.
7. If a ski resort tells you that skiing is inherently dangerous, and that you can get hurt, then a customer who buys a lift ticket can contemplate reasonable dangers, such as falling and receiving an ACL injury or colliding with another customer.
But, if that same customer is skiing down a groomed run and all of a sudden the run ends and the skier finds himself in mid air from sking off a cliff that the resort failed to mark or barrier in any way, do you think that a court should enforce the customer's assumption of a risk that he could not have contemplated in advance?
If you do, then you don't understand the law at all, because I can tell you that no court would enforce that agreement and the skier would have a case for damages against the resort for gross negligence.
Now, I'm done, and if you don't respond again, then we can end the debate.