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BrokeAndBroker.com Blog by Bill Singer Esq WEEK IN REVIEW

March 30, 2019

http://www.brokeandbroker.com/4509/finra-arbitration-ubs/
Our publisher Bill Singer loves to spin a good yarn. Some say Bill is one of Wall Street's great raconteurs. Some say he's just a loud-mouth pain in the ass. Frankly, there are those who say he's all of that, but, you know, to each his own, right? In today's blog, Bill regales us with yet another oddball tale from the annals of FINRA's arbitration forum. This time we are asked to consider a dispute involving seven promissory notes amounting to just shy of $800,000. They don't give such bucks out on the Street to deadbeats, so the recipient was likely among UBS's top producers. And if the Respondent in today's featured arbitration was sharp enough to earn the underlying loans, then he's probably going to do everything he can to fight his former employer's effort to obtain repayment. Sadly, as much as Bill would love to add his own color to this story, the arbitrators did such a great job penning their Decision that there's not much left for him to do. On the other hand, Bill did add some fun music videos from Jackson Browne, Humble Pie, and the Thompson Twins. Now that's quite the amalgamation!

http://www.brokeandbroker.com/4497/aegis-frumento-bitwise/
The Winklevoss twins and Bitwise proposed ETFs that holds only bitcoins. That raises an interesting question: If the markets in bitcoins are "orderly and efficient," then why wouldn't you simply buy bitcoins on one of those 10 "real" markets? Perhaps you don't really believe that those markets are truly orderly and efficient; and, if that's the case, then you may want an intermediary to hold liable. All of which may be a reason for not directly investing in bitcoins, but it's not why ETF's were made -- and it certainly doesn't justify a single cryptocurrency ETF.

US Supreme Court holds that dissemination of false or misleading statements with intent to defraud can fall within the scope of Rules 10b-5(a) and (c), as well as the relevant statutory provisions, even if the disseminator did not "make" the statements and consequently falls outside Rule 10b-5(b). 

http://www.brokeandbroker.com/4506/finra-arbitration-UCC/
Put three folks on a FINRA Arbitration Panel and, more often than not, they all agree on the verdict. Although it's not unheard of for a FINRA Arbitration Decision to be merely that of a "majority" of arbitrators rather than "unanimous," such occurrences are unusual. In a recent FINRA public customer arbitration, the Panel split 2:1 in favor of the customer and against FINRA member firm Sterne, Agee & Leach, Inc. As to be expected, not only were there some odd procedural issues in this arbitration but the three arbitrators disagreed about the proper application of the law. All of which makes for some compelling reading.

http://www.brokeandbroker.com/4507/Vanguard-Work-Avoidance/
Often, I find myself admonishing a client that "if you drive over someone with your car and kill them, you can't undo the damage by backing up over the body." In a recent FINRA expungement arbitration, a terminated employee sued his former firm in an apparent effort to win the removal of some unflattering language on his industry record. After the arbitration decision was issued, the former employee likely wished he hadn't started the whole mess.

http://www.brokeandbroker.com/4505/finra-settlement-suspension/
Our publisher Bill Singer, Esq. often criticizes FINRA's heavy hand, which he sees as coming down in disparate fashion upon the self-regulatory-organization's smaller firms and the industry's associated persons.  In today's blog, Bill takes FINRA to task for what appears to be a light hand in the form of an incomprehensibly short suspension. The Respondent stockbroker lied and lied and lied. He lied to his firm. Lied to FINRA. Lied orally. Lied in writing. He just kept getting it wrong. In response, FINRA just seems to want to work it out, and then say good night.  

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