January 10, 2015
With a new year upon us, it's often helpful to re-visit lessons that should have been learned from prior years; and what better place to start than what happens when a registered representative fails to report disclosable events. In this first such case of 2015, we find the old combo of liens and judgments, and, for good measure, an added dose of willfulness. READ To clean it up a bit: stuff happens. Everyday we make mistakes and many, perhaps most of them, are "inadvertent." A lot of crap that goes wrong isn't the result of some nefarious plan for world domination engineered by some brilliant but corrupt bad guy. All too often, when things go off the tracks and into a ditch, it's because some idiot just had a brain fart and screwed up. Unfortunately, when we try to apportion blame and seek redress for something that was unintended and accidental, it often devolves into a morality play of sorts. On Wall Street, regulation frequently comes off as little more than a sanctimonious, hypocritical speed-trap because far too many enforcement cases appear to be of the gotcha variety. Which is not -- and let me repeat that -- which is NOT to suggest, not even remotely, that there aren't lots of bad guys in the biz who intentionally do lots of wrong things and hurt lots of innocent folks. The challenge here is for balance. I applaud all the fervor that goes into investigating, charging, and bringing to justice the crooks. On the other hand, I also caution against excessive regulation because it cultivates a subculture where the dangerous lesson learned is that it's best to cover-up mistakes. Consider Bill Singer's concerns with this recent FINRA settlement. READ
Like, wow, man, this is a far out Wall Street regulatory thing about numbers, if you know where I'm comin' from and can dig it. But, hey, it's all cool and groovy what I'm laying down here and you better be waving your freak flag high because as Jimi Hendrix once said:
Now, if 6 turned up to be 9,
I don't mind, I don't mind.
In fairness to Jimi, it's a new song these days and FINRA's lyrics are different. The self-regulatory organization recently found one associated person's efforts to be off-key when he proposed that an 80, which was a 70, was like a 72. Unlike the rock 'n roll icon, FINRA does mind. READ Stockbroker, Compliance, Legal, and Regulatory Jobs. READ
There may be times when a registered person has a need to borrow money and, for whatever reason, a customer may be deemed the best source. In businesses and industries all over the country, customers get involved in lending to and borrowing from those with whom they have a business relationship. Frankly, it's not all that rare an event or that big a deal. On Wall Street, however, the whole lending/borrowing thing with a customer runs afoul of so many prohibitions and restrictions that it's rarely an advisable route for a registered person to pursue. In two recent regulatory settlements, we see how a customer loan for the purchase of a condominium and another loan towards a car landed two industry respondents in a mess. READ