May 20, 2017
Starting in June 2013 and running somewhere into January 2017, millions of shares of unregistered pennystocks were allegedly sold without the necessary due diligence. Additionally, Suspicious Activity Reports likely should have been but were not filed. Although the shares may have sold for mere pennies, the proceeds amounted to just shy of $25 million. Not exactly chump change. All of which prompts a Securities and Exchange Commission investigation and the scheduling of a full-fledged regulatory hearing. In keeping with the august tradition of the BrokeAndBroker.com Blog, we focus on the silliness that is often attendant to such regulatory enterprises of great pith and moment.
After a while, it vacillates somewhere between idiotic and exasperating. I mean, geez, how many more times ya gotta tell a stockbroker that when you leave your firm, you can't simply print out all of your customers' names and confidential information and then use that data to solicit those folks at your new place of business? Today, I am not getting into the issue of whether clients should be deemed the property of the firm or its employees. I am not getting into the fairness of the Broker Protocol. Today's BrokeAndBroker.com Blog is about reiterating that you can't disregard the industry's rules and regulations concerning non-public, confidential customer information. READ In an intriguing FINRA Arbitration Decision, the sole arbitrator hearing the case recommended the expungement of a customer complaint from a registered representative's CRD record. In an interesting twist, the customer favorably testified for the stockbroker. A more ominous twist was the finding by the arbitrator that Raymond James had "pressured" the stockbroker into settling the customer's complaint and that the firm had apparently docked the employee for the full cost of the cash payment. All of which prompts a chorus of "Tell Me Why." The response is thundering silence. READ In today's BrokeAndBroker.com Blog, we consider a public customer's complaints about TD Ameritrade's satisfaction of a margin call. As is often the customer's lament in these cases, a dispute arose as to which account assets were selected by the brokerage firm for liquidation in order to cover the call. The customer complained that the brokerage firm should have made more of an effort to get a higher price for a bond that it had declined to sell. Ultimately, it is a battle between the competing desires for customer service and the need to mitigate damages. READ
An elderly brokerage firm client designated his stockbroker as an account beneficiary; thereafter, the client substituted the broker's wife as the account beneficiary and named her as a beneficiary of his Will -- add into that mix of facts a further granting by the client of a medical POA to the stockbroker. At first blush, it's an unsettling fact pattern and concerns about elder fraud immediately pop into our heads.
BrokeAndBroker.com Blog publisher Bill Singer, Esq. underscores the valid regulatory/compliance issues raised in this case. Also, Bill wonder how much of what transpired may have been based on a healthy relationship among the customer, his stockbroker, and the broker's wife. As Bill admonishes, "may have been based" is not an acceptable level of detail in such an important regulatory/compliance case. READ