April 8, 2017
As the owner of a small FINRA member firm, Stephen Kohn has come to view BrokerCheck
as a threat to his firm's existence. Why? Because FINRA has allowed what should be an important tool for investor education to be utilized as a destructive tool by which large firms can launch the digital equivalent of a raid on their smaller competitors. How does this modern piracy work? READ
Wall Street regulation often takes on the imagery of a Kafka story. Lots of bureaucrats. Inexplicable laws. Unfathomable rulings and interpretations. Waiting for nothing. No lessons. Nothing to be learned.
In a recent Financial Industry Regulatory Authority settlement, some of the charges appear valid. On the other hand, much of what's presented to us comes off as the byproduct of going through the motions of a pre-fabricated settlement and moving on to the next case. We come away with more questions than answers. In the background, we can barely make out the noise. Sort of sounds like rubber stamps being pounded down and down and down. It is the thrum of regulation on Wall Street. READ
$9 Million Diamond Fraud Detailed In Unsealed Criminal Complaint
It reads more like a Hollywood script than a federal criminal complaint. According to "Ten Arrested For Defrauding Victims Out Of More Than $9 Million In Diamonds / Schemers targeted victims in New York, Las Vegas, and Mumbai, India" (Press Release, United States Department of Justice, 17-094 / April 5, 2017). READ Full-Text Complaint
Save a copy of today's BrokeAndBroker.com Blog. Send it to your friends. Send it to your family. Do whatever you have to do to warn the unwary and unsophisticated about the sharks out there on Wall Street and the snakes under too many rocks in the financial services community. Today's featured regulatory case involves an SEC Complaint against an individual who took the money and ran to the nearest casino. Lady Luck wasn't shining down on this gambler. In the end, a lot of hard-working folks lost every penny of their savings. Lifetimes of back-breaking 9-to-5 got dropped into slots and raked off the felt. Retirement funds were lost on cold dice, lousy cards, and the wrong color or number. Not what investors had expected. Not by a long shot -- except long shots weren't paying off on their investments. READ There are times in life when you just don't get a second bite at the apple, you don't get a second chance, you don't get a second take, you don't get a do-over, and you don't get a mulligan. Some folks are perplexed by life's one-and-done moments; and, in response, they seem to wonder if that's all there is. You sure? I can't take another whack at it? In a recent FINRA customer-complaint arbitration shows, we have a Claimant who seems to think that even after the fat lady sings, it's not over. Alas, it is over. As in fully, finally, and forever. READ
FINRA says that an associated person can argue that a customer's complaint was "false" and use that claim as the basis for seeking an arbitration panel's recommendation of expungement. A state court says that you can argue that it's "unfair" to allow a customer's complaint to remain on your record as the basis for seeking the court's order of expungement. False is not fair-is-fair. Two different issues. Two different standards. Two different forums for adjudication.
In today's BrokeAndBroker.com Blog, read what happened when allegations of falsehood became intertwined with allegations that it's unfair to allow a single, ancient complaint to tarnish an individual's otherwise unblemished industry record. You may think you know where author Bill Singer, Esq. comes down on the issue. Think again! READ