Restitution Discussion Group Archives
| Sender: |
John Murphy |
| Date: |
Sat, 2 Oct 1999 21:27:05 +1000 |
| Re: |
Brokers |
Does anyone know
of a good text (or cases) on the liability of stock brokers to clients in
the following circumstances:
1. The client, C, is fraudulently induced by a fraudster,
F, to purchase a worthless computer program which allegedly will give
buy/sell signals on the exchange-traded options market sufficiently accurate
to enable the client to own all the money in the world inside 5 years
(One wonders how otherwise intelligent people fall for this stuff, but
I expect greed beats brains any day).
2. F recommends that C should use B as a broker to execute the trades.
B, in fact, has allowed F to use B's well-known logo in F's glossy advertising
material.
3. B knows that C's orders to it are based on the output from the program.
4. B also knows, at least from experience with many other victims of
the fraud, if not from actually trying it himself, that the program doesn't
do what C thinks it can do and that, consequently, C is about to lose
his shirt.
5. Nevertheless, B executes the trades and pockets the commission.
Regards
John Murphy
------------------------------------ John Murphy
Barrister-at-Law
160 Hellawell Road
Sunnybank Hills Qld 4109
Australia
+61 7 3273-7193
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