April 11, 2015
Nothing like a good, old-fashioned, employment battle royal on Wall Street. The industry's version of a Steel Cage match in which nearly anything goes. In today's combat, we have a kitchen sink of allegations thrown against four respondents, who then tag team and go after three third-party respondents. Eight combatants in the ring at one time. In the end it's all somewhat entertaining, even if no clear winner emerges. READ
THE STORY THAT EVERYONE IS TALKING ABOUT!
As part of my law practice, I represent whistleblowers, and for several years, I have been representing one such client before the Securities and Exchange Commission ("SEC") and dealing with the federal regulator's Office of the Whistleblower ("OWB"). Frankly, the experience has been incredibly frustrating. I simply cannot persuade the OWB that it needs to adjust its mind-set and understand that my client is not an adversary or a defendant/respondent in a criminal/regulatory case. If OWB's attitude doesn't change, it will undermine the SEC's Whistleblower Program and dissuade informants from coming forward and deter lawyers from representing those individuals on a contingency basis.
As a former regulator with two Wall Street self-regulatory organizations, I fully understand and respect the need for prosecutors and regulators to scrupulously maintain whatever confidentiality is mandated for investigations and trials/hearings. Since I represent individuals and entities that are often industry defendants/respondents and I also represent defrauded public customers, I am particularly vested in ensuring that the regulatory and criminal justice processes remain legal and ethical. I understand the rules of the game and I honor the rulebook. It is in that spirit that I urge the SEC to implement more deadlines within its Rule 21F. Also, I urge the SEC to investigate its Office of the Inspector General ("OIG") and determine whether the use of third-party service providers is appropriate for the intake of complaints directed to that office. READ Human nature is a curious things. At times, folks do things so colossally stupid that it becomes awe inspiring. In a recent FINRA regulatory settlement -- well, actually, in two recent FINRA settlements -- we have the somewhat humorous and baffling conduct of a registered representative. This individual seems to have largely ducked the proverbial bullet by managing to settle charges with a suspension. As you will learn, he did one really foolish thing that persuaded FINRA to bar him. READ
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It was not the Securities and Exchange Commission's ("SEC's") finest hour -- some would even say it was a lost decade of regulation. The failures to timely detect and investigate Madoff and Stanford. The dismissive attitude towards the likes of Harry Markopolos. The disgraceful in-house politics that thwarted SEC investigator Gary Aguirre and eventually drove him from the regulator itself. Not a shining legacy.
In 2015, we are told that much has changed at the SEC; that it is invigorated by Mary Jo White's leadership, by Enforcement Chief Andrew Ceresney's aggressive agenda, and by Commissioner Daniel Gallagher's bully pulpit. Frankly, even as cynical a skeptic as I will give those three individuals credit for injecting new zeal into the federal regulator. On the other hand, it is important to remind ourselves of where we were in the not-so distant past. Indeed, we paid and continue to pay a painful price for unenlightened SEC administrators, a politicized regulatory agenda, and lackluster performance. To that extent, the past is still very much with us. READ