Facts

Susan Dumas filed a complaint against E*Trade Securities LLC, which, in turn, filed a counter-claim against Jason Parker. The dispute involved Dumas' margin trading.

CLAIMANT'S CONTENTIONS:
Dumas claimed she lost approximately half a million dollars in her securities account due to ETrade's negligence. Dumas asserted causes of action for fraud, breach of contract, margin calls, breach of fiduciary duty, breach of the covenants of good faith and fair dealing, negligent misrepresentation, breach of conduct, violation of Section 20 of the Securities Exchange Act of 1934, omission of facts, and suitability. Dumas' claims related to ETrade allowing Dumas to engage in inappropriate margin trading, and E*Trade's failure to notify her of a margin call.

RESPONDENT/CROSS-CLAIMANT'S CONTENTIONS:
ETrade denied Dumas' allegations, and asserted various affirmative defenses. ETrade asserted a claim for indemnification against Parker. Its cause of action related to Parker's maintenance of Dumas' account and his use of options and margin trading in Dumas' account.

Damages

Dumas requested between $474,811 and $544,179 in compensatory damages, plus attorney fees and costs. Dumas also requested $2,500 in travel expenses and fees. E*Trade requested costs, and travel expenses of $2,500.

Result

E-Trade ultimately dismissed its claim against Parker without prejudice. The FINRA Panel thereafter denied Dumas' claim in its entirety because she failed to show specific faults by E-Trade that caused her claimed specific losses.

Other Information

The panel also found Dumas liable for $2,500 in travel expenses to E-Trade for a last second cancellation of a previous hearing by Dumas' former representative, Stock Market Recovery Consultants. The panel found that although E-Trade did not do what they were supposed to, the panel did not believe that had E-Trade done what they were supposed to there would have been any difference in the result, because Dumas was in Parker's thrall. ARBITRATORS: Robert H. Putnam Jr., Constance P. Barr and James David Askren II.