In a FINRA arbitration statement of claim, the claimants sought damages arising from their investments in Fannie Mae ("FNMA") securities. The Arbitration Panel found that "[t]he recommended investment was suitable in every way except that the quantity of
shares recommended made a portion (40%) of the investment unsuitable given the
investors' risk tolerance at the time of purchase." Bill Singer discusses the illogical logic that the Arbitration Panel found that the investment was absolutely suitable except that it
wasn't because the purportedly suitable investment involved a recommendation of
an excessive amount of shares, which rendered the investment unsuitable.
See Bill Singer,"The FNMA Suitability Test: If my aunt were a man, she'd be my uncle," Forbes.com, Oct. 14, 2011.
Posted by William Alan Nelson II, Associate Editor, Wealth Strategies Journal
See Bill Singer,"The FNMA Suitability Test: If my aunt were a man, she'd be my uncle," Forbes.com, Oct. 14, 2011.
Posted by William Alan Nelson II, Associate Editor, Wealth Strategies Journal
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