It's a hot Friday in July. Everyone has their eye on the clock. Those who are physically in the office are dreaming about being at the beach. Those who are physically at the beach aren't thinking about being in the office. In consideration that we would all rather be somewhere else today, here's a short BrokeAndBroker.com Blog involving a disgruntled employee suing a former employer in a FINRA arbitration and obtaining an award. Don't miss the fun musical interlude! READ
Embedded in the fabric of our laws is the old Latin maxim: Ubi Jus Ibi Remedium -- which means that for every wrong the law provides a remedy. That's a nice and very ambitious goal. The problem is, it's both unrealistic and misleading. In fact, the law does not have remedies for every wrong. Too often, what the law offers is an arbitrary system of fines and imprisonment that proves unsatisfactory to victims as well as perpetrators. In the realm of regulation, we frequently see gross acts of misconduct being sanctioned by slaps on the wrist; and, similarly, we often see so-called "speed traps," where minor miscues seem to be the excuse to impose fines for the apparent purpose of raising revenue. Ultimately, there is a sense that those with wealth and influence not only have an inordinate influence in the drafting of laws and regulations but also gain an unfair advantage when it comes to paying for their crimes and civil infractions.
In a recent regulatory case, we have the interesting situation of a large company engaging in what appears to have been a somewhat modest violation largely prompted by the conduct of a third-party provider. For veteran regulatory lawyer Bill Singer, the issue is not whether a wrong occurred -- he concedes as much; and it's not whether the firm should have been censured and fined -- he concedes that the modest sanctions are not excessive. What Singer asks, provocatively, is whether this penny-ante approach to regulating Wall Street is calculated to achieve any meaningful change or whether, inadvertently, it may be prompting even worse behavior. The edgy aspect of today's blog is that it's not a small firm or individual registered person who is the respondent; to the contrary, it's a fairly substantial company. READREAD
The Financial Industry Regulatory Authority ("FINRA) recently announced a regulatory settlement involving a member firm that sort of got it right. It's the "sort of" aspect of the matter that should serve as a warning to all compliance departments and compliance officers. As is often the case, the broker-dealer had a lot of policies and procedures memorialized in its written supervisory procedures and, most critically, had delegated in that document critical oversight to its Chief Compliance Officers and other supervisors. Unfortunately, when it came to following the protocols for advertising, websites, social media, away accounts, and personal email accounts, the ball got dropped . . . over and over again. You only get so many double-dribbles before Wall Street's regulators call a foul. READ