An irreverent Wall Street Blog
BrokeAndBroker.com Blog by Bill Singer Esq WEEK IN REVIEW
May 14, 2022
Wells Fargo Sues Over Transitional and Production Bonuses But Rep Fights Back (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6445/wells-fargo-bonus/
Wall Street is about nothing if not money. In today's featured dispute, we got a transitional bonus. We got production bonuses. We got promissory notes. We got a FINRA arbitration about Wells Fargo's efforts to collect $1.6 million in balances due. A federal court district court tried to figure out what was a bonus, what was a loan, and whether the arbitrators got the facts right. Then came a Motion to Reconsider. From there, the case went up to a federal circuit court of appeals. Read today's blog to see how things turned out.
Federal Court Puts A Second Fork In Schottenstein FINRA Arbitration and Says It's Done And Done (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6446/schottenstein-sdfl/
The saga of Beverley Schottenstein's lawsuit against JP Morgan Securities and her grandsons Evan and Avi has been widely reported in the press. This litigation is the stuff of soap operas, rom-coms, and television mini-series. As with the old serial movies of years long since past, just when you think the end is near, there's a cliff-hanger. As we return to the action, a federal court seemed to have blown the final whistle in February 2022; however, this may be less American football and more like soccer where the time runs out but they keep playing into something called "extra time" which, for the life of me, I don't quite get because, you know, the clock shows "0:00" but, regardless, they keep on running around kickin' the ball. Best I can tell, the federal court's May 2022 whistle is ending the game but let's see how that all pans out over the next few months.
FINRA Torches Small Brokerage Firm Over Due Diligence Procedures (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6444/finra-awc-torch/
On Wall Street, the regulated and the regulators each have a role to play in the regulatory scheme. The regulated need to follow the rules. The regulators need to ensure that the rules are followed. Unfortunately, the industry's rulebook isn't so much a single volume as it is a massive encyclopedia with annual yearbook updates -- a reference for those old folks among us who still remember the hard-copy likes of an Encyclopedia Britannica. For regulation to work, there needs to be a sensitivity to the difference between willful and inadvertent noncompliance. Beyond merely imposing fines, Wall Street regulators have an obligation to timely flag oversights and misunderstandings. Unfortunately, on modern day Wall Street, too much of the art of regulation seems mired in gotcha.
FINRA Arbitrators and Federal Courts Consider If A Terminable-At-Will Employee Can Be Wrongfully Terminated (BrokeAndBroker.com Blog)
https://www.brokeandbroker.com/6424/warfield-icon-finra/
Your broker-dealer just fired you. You're angry because they sandbagged you and it was a set-up, or so you say. All of which prompts you to dial a lawyer, pay a hefty retainer, and, maybe in a year (if you're lucky), you'll find yourself before a FINRA Arbitration Panel asking for damages for "wrongful termination." Your former employer says that you and your lawyer are morons because you're a terminable-at-will employee, and, duh, you can't wrongfully terminate someone who's an at-will employee. In response, your lawyer points out to the FINRA arbitrators that we're all sitting in an arbitration hearing room because the former employee was forced by the former employer and industry rules to arbitrate his employment disputes: There's nothing at-will about any employment subject to mandatory arbitration. Read today's blog to see how such a case fared.