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BrokeAndBroker.com Blog by Bill Singer WEEK IN REVIEW

October 1, 2016

If you're a supervisor on Wall Street, it sort of goes without saying that you need to supervise. Unfortunately, a number of folks at Wells Fargo may be having an "ah ha!" moment as they read those wise words about the mechanics of supervision. In a recent FINRA regulatory settlement, the self regulator presented us with the case of a supervisor who seems to have had trouble engaging in effective supervision. In reading through the fact pattern of this case, you may be reminded of a moth getting too close to the flame. READ

Customer Twice Victimized By Broker's Impersonation And Online Disclosure

The conduct of the registered representative featured in today's BrokeAndBroker.com Blog was improper; by way of spoiler alert, the rep impersonated one of her customers.  The employer discharged the rep in 2014 but things sort of go off track afterwards, and we are confronted with the apparent missteps of in-house compliance and industry regulation. For one thing, the full name of the victimized customer was disclosed online -- for all to see -- for about two years! And this from a self-regulatory organization that goes to great pains to hide the disclosure of the name of a member's affiliated bank or even the name of non-member third parties. On top of that, it took two years for FINRA to settle the case even though the respondent had admitted guilt and been fired in September 2014. READ

NY Life Rep Crosses Arbitration Rubicon With Expungement Case

A former registered representative sued his former employer for six figures in damages. The causes of action were impressive. The Financial Industry Regulatory Authority's online BrokerCheck disclosed negative comments about the reasons for the challenged discharge but there were also some mitigating explanations included. Ultimately, the former employee came to the shimmering waters of the Rubicon and decided to cross. Was that the right decision in foresight and hindsight? Read today's BrokeAndBroker.com Blog and decide for yourself.

Sportspicks.Com Founder Lose FINRA Regulatory Wager

In and out. On and off. Registered and unregistered. There are points and counterpoints to many things in life and on Wall Street. There are things that you can do when unregistered that do not require any regulatory disclosures; but, should you return to the industry in a registered capacity, those past acts may require a current disclosure. Sometimes, things may slip your mind and you commit an inadvertent violation; other times, a regulator may not be convinced that your omission was simply caused by forgetfulness or misunderstanding. The difference between an inadvertent and an intentional nondisclosure may be the difference between staying in the business and being tossed to the curb. See how this all comes together in a recent FINRA settlement. READ

UPDATE: SEC Settlement Gives Respondent 168 Years To Pay

We are regularly bombarded with press releases heralding some purportedly profound and historic settlement or verdict.  Inevitably, as we read through the breathless prose announcing the legal outcome, we are told that some company or individual will pay a significant disgorgement and/or a crippling fine; but the cynics among us (of which I am one) arch an eyebrow at the announced dollars because we know that such sums are not always paid in full, if at all. Consequently, what looks like a financial burden upon a purported crook may well be nothing more than a non-collectible debt or, at worse, an obligation that is laughed at by the defendant/respondent.  In a recent SEC enforcement case, the ALJ found that the respondent demonstrated that, at most, he could pay $20,000 towards his $3.356 million financial obligations under the settlement. Now if only we could be sure that the respondent will live the 168 years required to satisfy his debt!  READ

OPEN CALL 
For BrokeAndBroker.Com Blog Guest Contributors


If you would like to pitch a Guest Blog for the BrokeAndBroker.com Blog, please send a brief outline of the proposed article to rrbdlawyer@gmail.com. 

I don't open attached files from unknown senders, so make sure that your pitch is in the text portion of the email. I welcome all views and perspectives, even when they erroneously conflict mine. Please do not send me puff or marketing pieces. I am looking for serious regulatory/legal/compliance commentary on important cases and developing issues. Also, I am seeking thoughtful observations about investing and market trends. Customer advocates and unrepentant industry apologists are all welcome. 

There is no compensation; however, I am happy to include in any article your direct contact information and professional biography. See these recent GUEST BLOGS:

If you can demonstrate a responsive audience for your musings, I will even consider a permanent column for you on my site. If you've got the writer's itch, scratch it at the BrokeAndBroker.com Blog. Send submissions to: rrbdlawyer@gmail.com

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