Blog by Bill Singer WEEK IN REVIEW

January 30, 2016

Federal Appeals Court Says Mandatory FINRA Arbitration Isn't Necessarily So

In "Alice's Adventures in Wonderland & Through the Looking Glass" by Lewis Carroll, we find these remarks:

'I know what you're thinking about,' said Tweedledum; 'but it isn't so, nohow.'

'Contrariwise,' continued Tweedledee, 'if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.'

Not to be outdone by Tweedledum or Tweedledee, the normally august United States Court of Appeals for the Second Circuit has just rendered an Opinion about Wall Street's mandatory, intra-industry arbitration that isn't so but contrariwise might be but for that fact that it isn't and ain't. Frankly, the Court's logic seems to have fallen down a rabbit hole. READ

FINRA Email AWC Raises Question About Regulatory Hypocrisy

A recent FINRA regulatory settlement seems to be on sound footing when it comes to citing a member firm for email violations. Then you re-read the fact pattern. And then you try and figure out not so much what the firm did wrong as what FINRA is suggesting it should have done right. And then your head aches. And then your head explodes. READ

Bill Singer Slams FINRA Ameriprise Arbitration Decision For Lack Of Content And Context

An Ameriprise Financial Services customer died and the estate's executor sued the brokerage firm for $1 million in compensatory damages and $1.5 million in punitive damages. Even as jaded an industry pundit as the BrokeAndBroker Blog's author and publisher Bill Singer takes notice of a FINRA arbitration with those multiple seven-figure damages. The jaded and dyspeptic Bill Singer also notes the lack of content and context in yet another FINRA Arbitration Decision -- and he's not pulling his punches or mincing words about his disgust. READ

Many registered persons are engaged in other professions and careers; and in most cases, you are required to provide prior, written notice to your employer of such Outside Business Activities ("OBA"). Although FINRA's OBA Rule doesn't require that the employer firm transmit an "approval' or "denial" to you of such disclosed OBA, the fact is that many member firms have in-house rules that prohibit such outside activities absent written approval or an approval imposing certain limits. Consequently, if you transmit notice of any OBA, make sure that you retain proof of the date and manner in which you transmitted that notice. Consider a recent FINRA regulatory settlement involving a stockbroker's role as an Executor. READ

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It is 1990 and we're at the regional semi-finals of the NCAA Men's Division 1 Basketball Tournament: the Sweet 16. With only 1 second left -- yeah, 1 second -- Clemson leads the University of Connecticut 70 to 69. UConn's Scott Burrell throws an inbounds pass about the length of the court. Within the remaining second, UConn's Tate George grabs the ball in the corner, shoots from 15 feet out, the buzzer sounds, the ball arcs down, and swish! Game over! UConn pulls out an amazing win via what has become known as The Shot. It's an amazing moment in college basketball history. 

Tate George was the man of the hour; but, as with so many hours in sports, this moment was destined to last about one second and no longer. Although George was drafted 22nd in the National Basketball Association's 1990 draft by the New Jersey Nets, in four years, George's NBA career would be over after averaging a mere 4.2 points per game with the Nets and the Milwaukee Bucks. He had his one-second of NCAA fame but not a professional career. The other day, George was stuffed by the Department of Justice's full-court press. As a result of a conviction on four-counts of wire fraud, he got hit with a nine-year personal foul. READ