An irreverent Wall Street Blog
BrokeAndBroker.com Blog by Bill Singer WEEK IN REVIEW
December 3, 2016
If you don't watch where you're sailing, you could find yourself aground on a sandbar. It's much the same for Wall Street's stockbrokers, as demonstrated in a recent Financial Industry Regulatory Authority settlement where a broker had endeavored out onto the stormy day-trading seas and beached his career on a regulatory bar. READ
After Michael Lewis published "Flash Boys," the world awoke to a very dire picture of high frequency trading ("HFT") and its corrosive and corrupting influences on the so-called level playing field that Wall Street so dearly wants to market to the public. The fact is -- and this is coming from a 34-year industry veteran -- there has never been a level playing field in the financial markets. They may want you to believe that fairy tale. You may actually believe it. But the truth is that the cards are often marked, the wheels are rigged, the dice loaded, and the House retains the odds (but there are more than a few professional cheaters who make a nice living operating on the fringe). Sorry to burst your bubble. All of which set the stage for the filing of a number of lawsuits about the fraud perpetrated via HFT and how more than a handful of self-regulatory organizations ("SROs") seemed to have either looked askance or, worse, engaged in complicit behavior. READ
Today's BrokeAndBroker.com Blog is a homage to a sitting Judge who truly understands that she is not merely writing for an audience of corporate lawyers but is also writing to inform the public, to document what a court found, and to explain why the court ruled as it did. You may think that's a simple task. Think again. Do yourself a favor: read Judge Thompson's Opinion in Tutor Perini, which is a phenomenal primer on Auction Rate Securities and how the Great Recession hammered that markets into a pulp. READ
After reading a recent Financial Industry Regulatory Authority settlement, I find myself unable to reconcile the regulator's allegations against a respondent registered representative with the regulator's fairly modest fine and relatively light suspension. When I say relatively light suspension, I readily acknowledge that it's for 14 months. All of which prompts me to wonder whether FINRA intentionally over-stated its case because the respondent threw in the towel and went along with whatever the regulatory wanted. The other possibility is that there are mitigating circumstances not set forth in the published settlement. I'll leave it to you, my readers, to parse through the implications and draw your inferences as you will. In the end, however, see if you can answer my question: What the hell does it take for FINRA to Bar a registered representative these days? READ
The Financial Industry Regulatory Authority's ("FINRA's") Acceptance, Waiver, and Consent ("AWC") appears to be the most common outcome for that self-regulatory organization's ("SRO's") investigations; however, the mechanics and consequences of the AWC settlement are rarely understood by many registered representatives acting as their own counsel, and often not properly explained by lawyers to their industry clients. Join veteran Wall Street regulatory lawyer Bill Singer as he guides you through the nuts-and-bolts of FINRA Rule 9216. READ