BrokeAndBroker.com Blog by Bill Singer WEEK IN REVIEW
January 9, 2016
SPECIAL ADVISORY FROM BROKEANDBROKER.COM BLOG:
On January 7, 2016, the BrokeAndBroker.com Blog ran an article: BrokeAndBroker.Com Blog Suspends Market Commentary Per Desolation Row Side Car Rules . Lemme see, how the hell I can put this delicately, a number of my astute readers apparently failed to appreciate that the article was a spoof. Given the crashing China stock markets and the overall international downward spiral among other exchanges, I didn't see much point in publishing a regular blog about regulation, litigation, or compliance. Although most of you fully got the joke and thanked me for a break from the otherwise dire week in the markets, a few, a very select few of you, actually thought that some "Securities Oversight Board," which I intentionally named the SOB (ya wanna take a careful look at that acronym?) had ordered the BrokeAndBroker Blog to cease publication as part of a marketplace sidecar rule. If, in fact, you bought into my tongue-in-cheek regulatory regime, you may have a far better understanding of how folks like Bernie Madoff and pennystock scamsters are able to defraud folks who are seemingly intelligent. Next time you read about how a group of investors were duped into sending their money to a fraudster, remember how easy it was for me to draw you into my web of deceit and nonsense.
Rude And Divisive Barclays Employee Loses Note Case
I can't even begin to tell you how many times in my three decades on the Street that I have seen a given individual's interpersonal skills (or lack thereof) at the core of a regulatory, civil, or criminal case. Digital communications have a half-life way beyond that of Plutonium-244. You post something on social media or send an instant message or fire off an email and your words may outlive cockroaches and Keith Richards. A moment's impatience or an urge to set someone straight may come back to haunt you. The spoken word is subject to nuance in ways that never quite materialize for digital communications -- sarcasm, humor, irony, just don't quite seem to live and breathe on a hard-drive.
What's the solution? Are you supposed to bite your tongue when dealing with idiots? Are you supposed to let some moron in compliance or in the legal department talk down to you as if you were a child? That all depends. Sometimes the best response is no response. Other times you may be better advised to look for other employment while deflecting the barbs from your current employer. Ultimately, if a purportedly impartial panel of three arbitrators finds that your communications are "rude and derisive," you have not done yourself any service. On top of all of that, you never, ever want to see an arbitration decision include a finding that you had "fabricated notes of asserted conversations" when your veracity may be at issue. A recent FINRA Arbitration Decision involving a former Barclays employee and his unpaid promissory note principal offer an fascinating window into many of these issues. READ
(d) Pursuant to the implementation of any "Halts In Trading" as provided under this Rule in (b)(i) and (b)(ii) above . . . nationally recognized publications . . . newsletters, blogs . . . shall cease publishing market commentary. In particular . . . the nationally acclaimed "BrokeAndBroker.com Blog" . . . published by the nationally recognized regulatory authority "Bill T. Singer, Esq." . . .
Macquarie Pays $2.95 Million Blue Sheets Fine
For decades, when Wall Street regulators were conducting investigation of trading issues, such data was literally transmitted from industry firms on blue paper; hence the derivation of the name "Blue Sheets." Sadly, I am old enough to remember the colored pages. Despite the advent of electronic filing, however, the term Blue Sheets has hung on as a quaint reminder of the old days.
Understandably, regulators rely upon the accuracy of Blue Sheet submissions when investigating trading issues such as suspicious trades, manipulations, etc. Consequently, the onus is on industry firms to ensure that they are accurately compiling and presenting data for the trading under scrutiny.
As with many regulatory obligations imposed upon Wall Street, the Devil is in the details and we frequently find efforts at compliance as more aspirational than acheived. Recently, FINRA fined two member firms for Blue Sheet violations and those settlements are discussed in today's BrokeAndBroker.com Blog. READ
Did Registered Rep Voluntarily Quit Or Was She Fired? Arbitrator Says Neither
Did she voluntarily quit or was she permitted to resign? Was the former employer/broker-dealer acting within its rights to impose a $7,500 on its former registered representative for having opened two outside accounts? And what about the thousands of dollars sitting in the error account -- was the former employee entitled to some of that? Those and other questions arose within the context of a FINRA intra-industry employment arbitration. The sole arbitrator parsed through the assertions and defenses, and produced a nuanced Decision. An interesting read that touches on many compliance and litigation issues. READ