Patricia complained that the trading company she used didn’t give her the information it should have when a merger took place.
What happened
Patricia had held 200 shares in a company for many years. The company was involved in a merger and Patricia’s trading company told her she’d receive cash and four shares in the newly merged company in exchange for her shares.
Patricia complained that the trading company hadn’t sent her the election options linked to the merger. She said she should have been given the choice of receiving either cash or shares. She said that she would have chosen to receive shares and complained that she’d lost out because she hadn’t been given the choice.
The company said it didn’t provide Patricia with the election options because its international custodian gave it incorrect information. It also said that even if Patricia had been given the choice, there was no evidence she would have chosen to receive shares. It said her argument was based on hindsight, because the share price of the new company had increased.
The company also argued that Patricia should have bought the shares with the cash if she wanted them and that would have left her with a smaller loss. They offered her £150 for the poor service she’d received. But Patricia didn’t think this was enough and brought her complaint to us.
What we said
We looked into what happened and at the terms and conditions of Patricia’s account. We thought it was fair to hold the company responsible for Patricia not being given the election options.
Patricia said she’d owned shares in the company for at least ten years and wanted to continue holding shares in the newly merged company.
We couldn’t be sure what Patricia would have decided if she’d been given the election options. But because she’d held shares in the company for ten years, we thought it most likely she’d have chosen shares in the newly merged company. We did think Patricia could have done more to reduce her losses by using some of the cash to buy shares in the new company.
We upheld Patricia’s complaint. We thought Patricia should be put back in the position she would have been in had nothing gone wrong. She wanted shares in the new company, but we thought she should have done more to reduce her loss. So, we thought it would be fair for Patricia and the company to each meet 50% of the cost of getting her the shares.