That Stockbroker's Customer Blowing Steam Or Making A
Listen . . . I'm not happy with my REIT investment . . . damn thing is illiquid . . . get me out of that dog as soon as you can. Okay, so, put your FINRA regulatory thinking caps on. If you are a stockbroker and you get the above in an email from a customer, would you deem the language to constitute a "complaint"? If you disclose that email on all of your industry records as a complaint, it will be seen as a mark against you because, well, you know, it's a customer complaint. What part of the email is actually complaining about anything that the stockbroker did versus the toxic nature of an investment? Does that matter? Should it matter?
Gambling Stockbroker, His Elderly Customers, And Their Loans To
Him (BrokeAndBroker.com Blog)
When regulators and prosecutors realize that they're dealing with a defendant or respondent who simply wants to get it over with and settle, it's sometimes viewed as an invitation to pile on the prose and paint a far worse picture of what allegedly happened. After all, if the adversary has thrown in the towel and there's no chance of going to trial, why not burnish your image and do a little bit of self-serving public relations? In a recent FINRA regulatory settlement, it's hard to tell where the reality of what seems a horrific scenario begins and where the fiction of making a bad situation look even worse ends. We got a stockbroker with gambling debts. We got elderly customers. We got loans from those customers to their stockbroker. It could all be benign. Then again, it may be as frightening as it seems. Unfortunately, FINRA's statement of facts is so pregnant with negative possibilities that it's impossible to come away from this case with any sense that you know what went on and you understand how it all got wrapped up. And if the misconduct is truly as bad as FINRA suggests it is, then how are we to explain what comes off as a somewhat tepid fine and suspension?
Money for Nothing. Take the Money and Run. Catchy tunes. You get them in your head and they stay there. Sort of like today's BrokeAndBroker.com Blog in which we watch a stockbroker push the plunger on his career -- even if only for a few months -- because of a measly $555. Maybe this respondent sort of confused a "sweep account" with his "business development account" and figured that he should sweep the year-end remaining balance from his firm into his own pockets? I mean, okay, we all have been tempted by such an impulse from time to time. On the other hand, most of us avoid that temptation. Most of us distinguish between that's mine, that's theirs, and, geez, if I get caught this could end in disaster. How's that lyric go? Money for nothing and . . . oops, I don't think the rest of that lyric is still politically correct. How's that other song go? Oh yeah: Bill Mack is a FINRA detective. You know he knows just exactly what the facts is. He ain't gonna let those two escape justice.
Imagine that a contractor installed a state-of-the-art sprinkler system but never connected it to any water source. Now start a fire. With that image in mind, consider today's BrokeAndBroker.com Blog, which discusses a recent FINRA regulatory settlement involving allegations that a member firm botched its use of so-called activity letters. It's a fairly compelling effort by FINRA but for the fact that the published settlement agreement raises a few questions that aren't answered.
Come with me as we journey back in time some nine years to December 2009, when FINRA member firm Sharemaster submitted its 2009 annual audit. That 2009 audit was submitted without an attestation that it had been conducted by a Public Company Accounting Oversight Board ("PCAOB") registered accounting firm. On May 3, 2010, the FINRA Department of Member Regulation (the "Department") notified Sharemaster that its membership would be suspended because the firm had submitted its 2009 audit without the PCAOB attestation allegedly required pursuant to '34 Act Rule 17a-5. Some nine years later, after hearings at FINRA, and appeals at the SEC and the 9th Circuit, the SEC finally puts this beast out of its misery. What a pathetic misuse of FINRA and SEC regulatory staff and resources, and what a goddamn waste of time!