August 6, 2016
We want our money back and we want it now! That's the familiar refrain from the former employer when there is an outstanding balance due on what Wall Street calls employee forgivable notes ("EFLs"). Usually, it's a pretty simple equation: The employer lends money subject to terms, repayment is forgiven at certain landmarks in time, if the employee leaves before all of the loan has accrued, the firm wants the unaccrued balance back.
The thing about "pretty simple equations" when it comes to employment disputes, however, is they ain't pretty and they ain't simple equations.
In a recent FINRA arbitration, the likely-confident Morgan Stanley demanded repayment of nearly $10 million in promissory notes. When we're talking about a lawsuit over $10 million in employee loans, ya gotta know that this is gonna be a bloody mess -- which it was. The former employee gave back as good as he got and demanded some $30 million-plus in damages. Poor, poor, poor Morgan Stanley. I'm guessing the firm didn't see that the light at the end of this particular litigation tunnel was an oncoming train. READ
What we got for you today on the old BrokeAndBroker.com Blog
is a dose of double trouble. Two FINRA regulatory settlements. Two . . . count 'em. Double trouble resulting in one guy getting fined and suspended and the other guy getting barred. The first bit of trouble involves a registered rep and nine fictitious auto insurance policies. The second bit of trouble involves another rep and college planning services. All of which reminds us of those woeful lyrics from Otis Rush's "Double Trouble." READ
They say that no good deed goes unpunished. Sometimes those old sayings prove wise. In a recent FINRA regulatory settlement, we are confronted with allegations that a former Citigroup Global Markets investment banker was involved in humanitarian projects but he ran afoul of FINRA's Outside Business Activity Rule . . . or did he? Join with BrokeAndBroker.com Blog's publisher Bill Singer on a provocative exploration of this case. READ
Like Santa Claus, it appears that some Wall Street brokerage firms make lists of customers who are naught and nice, and check them twice. If you find your name on one of these lists, there's a good chance that you may get a lump of coal from the brokerage firm in the form of being barred as a customer. BrokeAndBroker.com Blog examines what happened to one customer who was placed upon such a list but perhaps with a little assist from his sister-in-law and perhaps with a little assist from his stockbroker may have circumvented the brokerage firm's blacklist.
Funny thing, isn't it, that we have brokerage firms barring naughty customers but I can't recall a single list compiled by the SEC or any other regulator that barred any too-big-to-fail brokerage firm/bank after all the nasty acts leading up to the Great Recession. Then again, when it comes to Santa, elves, and lists of good little boys and girls, it's all sort of like fair and effective Wall Street regulation -- another fairy tale. READ
First, he gave prior written notice to his brokerage firm of his intent to engage in an outside business activity. The firm approved. Then, a few months later, the firm changed its mind because of "potential" conflicts and told the stockbroker to shut down the previously approved activity. Then all hell breaks loose.
Sometimes you find analysis about the regulation of Wall Street in the most unexpected places. Who knew that the seeming gibberish and nonsense from the Beatles' "Hello Goodbye" were actually sage comments about FINRA's Outside Business Activities Rule. Pointedly, the Fab Four demonstrated their brilliant understanding of self regulation when they admonished:
You say yes (I say yes) I say no (But I may mean no)
You say stop (I can stay) and I say go go go (Till it's time to go), oh, oh no
You say goodbye and I say hello, hello hello
I don't know why you say goodbye, I say hello, hello hello