April 15, 2017
Under consideration today is a FINRA public customer arbitration in which the suing customer is awarded about 19% of what he was seeking. It's an odd result because the arbitrators found that the firm and its representative were negligent in communicating with the customer; but the arbitrators also found that the customer hadn't done enough due diligence. Add into that mix a finding that the firm had not adequately trained a raw rep.
All of which leaves us with "on the one hand" and "on the other hand." Frankly, it left me spinning in circles trying to figure out liability and the calculation of the award. That being said, no matter where you come down on the result, this Panel should be complimented for explaining their view of the claims and facts. If nothing else, should this case wind up on appeal, a court will have something to chew on when deciding whether to affirm or vacate. READ The BrokeAndBroker.com Blog frequently covers FINRA regulatory cases involving allegations of improper borrowing by registered representatives from customers. Although such cases represent a significant portion of the docket, the regulator's "Sanction Guidelines" inexplicably offered no guidance on the considerations for imposing fines or suspensions for such misconduct. Thankfully, FINRA recently rectified this glaring omission with a thoughtful revision of its Sanction Guidelines. READ We all know that person. The one who just doesn't seem to get it. No matter how gentle or persistent the warnings. No matter how loud the alarm. No matter how bright the flashing sign. For some reason, "no" doesn't quite register with them. As a recent FINRA regulatory settlement demonstrates, there are more than a few clueless folks working on Wall Street. READ By way of spoiler alert, today's BrokeAndBroker.com Blog features the FINRA regulatory settlement of a former Merrill Lynch rep who allegedly took home confidential customer information involving 100 accounts, and, after leaving the firm and the industry, tried to sell the info for $10,000. Not a lot in that fact pattern to engender much sympathy for the guy. In fact, Bill Singer is wondering why FINRA seems to have pulled its punch when sanctioning this respondent. READ
In July 2013, mankind lost a battle with our machine overlords when 86 computer servers were subjected to a so-called "standard refresh," and two of those servers turned out to be Decepticons that refused instructions to "properly" reload an email retention and supervision program. As I write these last words from the bunker, I warn you, beware of the FINRA cohorts now embedding themselves in the infrastructure of Wall Street! READ