Case Name: Muriel Siebert & Co., Inc., Respondent, v. Gregory Wilt, Also Known as Greg Wilt, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1990-02-13
Citations: 158 A.D.2d 343
Docket Number: 
Parties: Muriel Siebert & Co., Inc., Respondent, v Gregory Wilt, Also Known as Greg Wilt, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 158
Pages: 343–343

Head Matter:
Muriel Siebert & Co., Inc., Respondent, v Gregory Wilt, Also Known as Greg Wilt, Appellant.

Opinion:
Defendant is a customer of plaintiffs discount securities brokerage firm which carries out orders by buying and selling stocks at the request of customers. At the close of business on October 19, 1987 (Black Monday), defendant's account had a debit (negative) balance of $500,217.17. As a defense to this action by the brokerage firm for a recovery of this balance, defendant asserts that, had the telephone lines been open, he would have engaged in transactions which would have avoided the resulting debit balance. Defendant alleges that the brokerage's failure to provide open telephone lines constitutes a breach of fiduciary duty, negligence and breach of contract.
We find no merit as a matter of law to defendant's asserted defense. We agree with Justice Shainswit's observation that: "Plainly, the defense here, if allowed, would open floodgates that would make it impossible for any securities broker to collect a debit balance. If a customer could simply announce that, if the phone had not been busy, he would have engaged in a transaction that would have made, rather than lost, money, the perfect protection against margin calls would have been found." Concur—Kupferman, J. P., Milonas, Asch, Wallach and Rubin, JJ.