April 2, 2016
Well-drafted contracts and agreement are useful as a sword or a shield, depending upon which party is seeking the protection of the terms. When documents say what they mean and mean what they say, all sorts of relationships move forward on firmer ground, and all sorts of relationships may be terminated with more confidence as to what's fair and appropriate. Unfortunately, too much of the paperwork that has made its way into our daily dealings has been cut-and-pasted into endless versions and revisions without anyone actually reading the resulting monstrosity and asking just what the hell does it all mean. In two Wall Street employment disputes that resulted in FINRA arbitrations, we see how ambiguous and vague language becomes the proverbial monkey-wrench in the machinery. READ
Today's BrokeAndBroker.com Blog
considers the complaints of two public customers who were angered about losses sustained in their Individual Retirement Accounts as a result of allegedly being overly-concentrated in an African mining stock. Right off the bat, this is going to be a tough one for any stockbroker and/or brokerage firm to defend. Just juxtapose a few concepts: IRA, African mining stock, and over-concentration. Not that those three planets should never come into the same orbit but, you know, even at first blush you got more questions than answers. READ
In today's BrokeAndBroker.com Blog
, we are confronted with a matter of semantics: What does "former" mean? Words are important and, sometimes, the definition of a word is more important than the word itself. Reputations, lives, and careers often hang in the balance when it comes to such interpretations. As former President Clinton so famously explained "It depends upon what the definition of 'is' is. READ
Wall Street is regulated by the federal Securities and Exchange Commission, by state securities divisions, and by the self-regulatory organization the Financial Industry Regulatory Authority. On top of that regulatory regime, we should also add the Federal Bureau of Investigation, the Department of Justice, the United States Attorneys, the states's Attorneys General, and, in some cases, local county or district attorneys. For such a prodigious tower of oversight, it's puzzling how poorly it all works -- or fails to. Feuding regulators battle over turf and precious media exposure instead of walking the beat. Competing regulators inefficiently pursue similar investigations seeking the same documents resulting in redundant charges. Adding insult to injury, public investors and industry participants frequently complain about being sent from an examiner to a supervisor to an office to a division to a department to an agency -- all of which culminates with no one able to solve a problem or willing to take responsibility. The process is endless, suffocating, and impotent.
For much of my three-plus decades on Wall Street, I have waged an often lonely but persistent battle in favor of regulatory reform. Pointedly, I have long advocated the end of SROs and a modernization of the tired policies and practices in place at the SEC. A recent case filed against FINRA in federal court raises many issues about the state of Wall Street regulation and underscore the need to bring about overdue reform. READ