Latest Round of Wall Street Regulatory Idiocy: Zipper/Dakota v. FINRA Arrives at Point of Insanity

Over a year ago, I lamented in "FINRA And SEC Continue Dakota / Zipper Ping Pong Game Of Dubious Regulation" (BrokeAndBroker.com Blog / March 18, 2022)
https://www.brokeandbroker.com/6351/zipper-dakota-finra-sec/

Today's blog is less a legal analysis of a case than it is a somewhat pathetic rendering of all that is wrong with Wall Street regulation. Unfolded before us is what appears to be a record of misconduct by the respondents as developed by FINRA; regardless, you're left wondering whether FINRA would have opted for the same hammer and tongs approach against a large member firm and one of its C-suiters. Making matters worse, FINRA and the SEC seem engaged in a ping-pong game of sending a case up to the federal regulator on appeal and back down to the self-regulator on remand and then back up and then back down and, well, sigh . . .

The hammer continues to hammer. The tongs continue to squeeze. The ping-pong game goes back and forth. In the Matter of BRUCE ZIPPER and DAKOTA SECURITIES INTERNATIONAL, INC. For Review of Disciplinary Action Taken by FINRA (SEC Second Order Requesting Additional Written Submission; '34 Act Rel. No. 98121; Admin. Proc. File No. 3-20811)
https://www.sec.gov/files/litigation/opinions/2023/34-98121.pdf In this latest round of Wall Street regulatory idiocy, we arrive at this point of insanity [Ed: footnotes omitted]:

Now in the present proceeding, Bruce Zipper has again signed briefs on behalf of himself and Dakota. On July 25, 2023, we issued an order directing Dakota, through its attorney or bona fide officer, to file an additional written submission stating whether it wished to join Bruce Zipper’s briefs. On July 27, 2023, Bruce Zipper filed a response stating that he “founded Dakota” and “[i]n the last year Dakota was in business [he] was the only employee and the president of the firm.” He requested that we allow Dakota to join his briefs. But Bruce Zipper has not established that he is a bona fide officer of Dakota capable of representing Dakota before the Commission. Although Bruce Zipper was Dakota’s president, the record before us indicates that position terminated in 2018 when Bruce Zipper sold his interest in Dakota to his wife, which also appears to be the last year Dakota was in business. As of the date of this order, Dakota’s state corporate filings and BrokerCheck still list Margaret Zipper as Dakota’s president and do not mention Bruce Zipper. 

Accordingly, IT IS ORDERED that Dakota, through its attorney or a bona fide officer, file an additional written submission addressing whether it wishes to join Bruce Zipper’s briefs in this proceeding by August 28, 2023. Pursuant to Rule of Practice 180(c), failure to make the required filing may result in dismissal of this review proceeding as to Dakota. This order is not to be construed as expressing any view as to the Commission’s resolution of these issues or the review proceeding generally. 

at Pages 2 - 3 of the SEC Order

Bill Singer's Comment

Depending upon where you want to stake the beginning of this regulatory silliness, you could begin with 2016, when Zipper entered into two FINRA AWCs. Or you could go back to 2015 when FINRA conducted an examination of Dakota (Zipper's firm). All of which is mere prelude to a host of appeals and stays and remands and more appeals.

Somewhat lost in this abysmal failure of common sense and pragmatism is this admission in the above Second SEC Order: "in 2018 when Bruce Zipper sold his interest in Dakota to his wife, which also appears to be the last year Dakota was in business." As in Dakota is out of business and has been since 2018. Y'know, like five years ago. And if you slowly, methodically, and carefully consider the SEC's Second Order, you come to the realization that the federal regulator is ordering an out-of-business FINRA member firm to "file an additional written submission addressing whether it wishes to join Bruce Zipper’s briefs in this proceeding by August 28, 2023." Okay, sure, why not have a regulatory seance and conjure up the dead.

• Zipper
• Dakota
• SEC
• FINRA
• AWC
• BrokeAndBroker
• Bill Singer