November 14, 2015
In recent years, the Federal Bureau of Investigation has used undercover operatives to penetrate the ranks of unscrupulous issuers and "stock promoters" who try to foist pennystocks upon an unsuspecting public. Sometimes the fraud is clever but, more often than not, it's little more than the old Pump-And-Dump. As explained in this BrokeAndBroker.com Blog, three individuals ensnared in a pennystock sting found their way onto the federal criminal and the Securities and Exchange Commission administrative dockets. READ
When I was a much younger man and doing two stints as a lawyer with Wall Street self-regulatory organizations, I would find in my in-box matters involving alleged Net Capital violations. As best I can explain it, ya got yer sexy regulatory matters like insider trading, unsuitability, and elder fraud; and then ya got yer bone-numbing, boring regulatory matters like Books-And-Records and Net Capital. The sexy stuff is, relatively speaking, fun to handle. The bone-numbing stuff, as the term suggests, tends to elicit an "oh crap" response and little more than unhappy resignation to find yourself investigating and perhaps prosecuting such violations. Given those factors, some SEC regulators and federal prosecutors sort of lucked out when a combination Books-And-Records and Net Capital matter mushroomed into a criminal case replete with the oddball facts that could only put a smile on the face of a hardened regulator and prosecutor. READ Echoes Of A Stockbroker's Mind For A Hacker On A Wire
Another day. Another wire transfer compliance and regulatory problem. What's a registered rep to do? How hard should you press for confirmation from the sender of an email seeking to move money out of his or her account? Your firm has rules about confirming with the customer but it can be a delicate issue. "You must not ask for so much," was the admonition in the song Bird On The Wire, but in that same song, the question is asked: "Hey, why not ask for more?" Of course, to cite the lyrics of another song: "Everybody's talkin' at me, can't hear a word they're saying, only the echoes of my mind." Ummm, lemme give ya a hint, those so-called echoes of your mind ain't gonna stand up under any regulatory scrutiny. READ
