An irreverent Wall Street Blog

BrokeAndBroker.com Blog by Bill Singer WEEK IN REVIEW

November 19, 2016


Today's BrokeAndBroker.com Blog continues our unique and exhaustive coverage of the epic battle between the United States Securities and Exchange Commission and Gary L. McDuff. By way of a brief synopsis, in 2013, a federal criminal jury took only six minutes to convict McDuff of conspiring to defraud investors out of over $11 million in connection with an investment fraud scheme and, further, of laundering the proceeds. In 2014, Defendant McDuff was sentenced to 300 months in federal prison and ordered to pay $6.5 million in restitution. Inmate McDuff is presently incarcerated at a low-security, federal correctional institution in Beaumont, Texas. READ


We start with a husband and wife. We add to that state of marital bliss a joint production agreement at a brokerage firm. Love fades. Divorce ensues. And then, all hell breaks loose. Enjoy today's epic litigation battle replete with lots and lots of music videos. READ


What you see is what you get is very true when it comes to reading regulatory settlements by Wall Street's self-regulatory organization the Financial Industry Regulatory Authority. Of course, there are skeptics of the very nature of self regulation, and I am one of the loudest, most persistent, and most persevering voices of criticism. In my role as a pesky gadfly buzzing around FINRA's head, I often roll my eyes when reading its settlements and disciplinary and arbitration decisions. Sure, whatcha see is whatcha get but what about whatcha don't see?  What about all the stuff that is routinely left out of the self-regulator's published disclosures?  

Under the direction of new Chief Executive Officer Robert Cook, FINRA seems to have a veteran hand on the helm and this bulky battleship of a self-regulator is slowly being turned to the right course. As such, no, I'm not going to bash Cook and, yes, I am still allowing for a honeymoon before I hold his feet to the fire. Frankly, what I'm hearing about him is encouraging and, more to the point, we're entering the holiday season. Even the prickly Bill Singer, that curmudgeonly voice of the BrokeAndBroker.com Blog has a heart, small and burnt-to-a-crisp as it may be. 

So . . . I wish Mr. Cook and his minions a happy and healthy upcoming holiday season but before y'all chomp down on your festive meals, would you please read today's article and give it some thought? READ


Napoleon Bonaparte made a fair point when he quipped that "there is only one step from the sublime to the ridiculous." As demonstrated in a recent Securities and Exchange Commission proceeding, there is only a short distance from the sublime seriousness of charging a respondent with misconduct to the exasperating ridiculousness of trying to close the books on that proceeding and issue a decision. READ


Today's BrokeAndBroker.com Blog presents a lawsuit that you may already have heard about: Move, Inc. Plaintiff/Appellant, v. Citigroup Global Markets, Inc., Defendant/Appellee (Opinion; 9 Cir.; 14-56650, 14-CV-04418 / November 4, 2016). Then again, what you "heard" about a case and what that case really involves are often two very different things. The underlying dispute in Move v. Citigroup involves yet another claim to recover losses sustained by a customer that purchased Auction Rate Securities, which were sold by Wall Street as "good as cash" but turned out to be anything but. What is more troubling about today's featured case, however, is the manner in which the Financial Industry Regulatory Authority conducted the mandatory arbitration. READ. 


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