Why a Proposed Class Action Cannot Be Arbitrated
The De Silva Law Offices is representing two lead plaintiffs, who filed a proposed class action over TD Ameritrade and TD Ameritrade Futures and Forex' handing of trading during the unprecedented occurrence of negative oil prices on April 20, 2020.
Our clients, Wei Wang and John Lindstrom, are the two plaintiffs in the case of Wang v. Ameritrade.
Wei Wang and John Lindstrom alleged that TD entities could have reduced or avoided the losses they suffered by making by preparing for the occurrence of negative oil prices as the brokerage had been advised to do by repeated advisories from the CME Group, Inc. TD entities responded to our clients’ class action lawsuit by motioning to compel arbitration on some unconscionable terms.
The American Bar Association defines arbitration as a “private process where disputing parties agree that one or several individuals can make a decision about the dispute after receiving evidence and hearing arguments.” Arbitration is a quick and informal process compared to traditional trials and is effective for the rapid resolution of certain factual disputes, which is what motivated the TD entities to request such a method of resolution. The legislative history of the Federal Arbitration Act ("FAA") shows that the purpose of the FAA was to enforce arbitration agreements according to their terms. The intent was not to elevate arbitration agreements or enforce them if they were violative of federal regulations or inherently ambiguous. Congress had a modest goal when it enacted the FAA-to make sure that arbitration agreements would cease being ignored in wholesale fashion. Unfortunately, arbitration clauses are increasingly common in many contracts and they are called contracts of adhesion because in order to have hundreds of goods and services made available to them, consumers are required to first waive their right to seek justice in a court of law. This happens commonly in many employment situations which leaves workers unable even to sue for illegal discrimination.
Attorney R Tamara de Silva issued the following statement, "The resolution of this dispute cannot be privatized to an arbitral tribunal, whose ability to understand the substantive legal issues and complex factual ones, will not equal that of a federal court judge. What is more, the venue of an arbitral tribunal would be inappropriate given that it will only allow for limited discovery and limited witnesses. The issues in contention in this case are complex and several, and they cannot be considered without looking at a substantial amount of data."
Ms. de Silva' motioned to deny TD Ameritrade's request to compel the class action suit to arbitration for the following reasons:
- The defendants are not entitled to their own set of facts
- The TD entities described a single arbitration agreement in their motion seeking arbitration when "there are actually two relevant, albeit contradictory arbitration agreements at issue in this case"
- Lindstrom hadn't signed an arbitration agreement
- There are serious questions about the legality of both arbitration agreements
- Arbitration is an improper forum for an expeditious, fair and fulsome adjudication of the complex legal issues involving statutory claims like in this case, involving Dodd-Frank, and the Commodity Exchange Act
- Allegations include that: TD entities had failed to disclose the possibility of a price-below-zero scenario to TD clients, though they were warned by the relevant exchanges; that they failed to make sure their trading platform performed in a negative price environment; that they failed to inform customers that they would not be prepared; failed to help clients "exit, roll, modify or offset" their crude oil futures; and "liquidated plaintiffs' positions in a commercially unconscionable manner."
Attorney R Tamara de Silva works tirelessly to ensure the legal, personal and financial interests of our clients are safeguarded at all costs. We recognize that they shouldn’t suffer staggering losses as a result of TD entities’ poor management of oil futures and questionable arbitration agreements, which is why Mr. Wang and Mr. Lindstrom can depend on our attorney to help prevent that.
The case of Wang v. Ameritrade was recently featured in Law360. If you have any questions about our efforts in this case or need high-caliber representation in Chicago, entrust our FinTech attorney who obtains over two decades of experience in complex civil and white collar criminal defense.
Contact our firmat (312) 500-8424 to learn more!