May 19, 2018
What's a lot? What's reasonable? How many times is frequently? When is enough, enough? What does it mean to participate? These and other mysteries of the Universe keep BrokeAndBroker.com publisher Bill Singer awake through the night and into the early morning. You are able to sleep soundly because of the unselfish efforts of folks like Bill who man the ramparts of philosophical thought and aimless rumination. In today's blog, Bill has tanked up on coffee after spending staying awake to ponder whether hand delivering a check rises to the level of participating in a private securities transaction. Bill is also wondering how his New York Mets started off with 11 wins and 1 loss and now have a record of 20 wins and 19 losses.
A statutorily disqualified individual sells her book of business and it is assigned to a duly registered stockbroker. So far, so good. The stockbroker's firm tells him it's okay to communicate with the disqualified broker in order to arrange for the smooth and orderly transfer of clients but, beyond that handing off of her biz to you, you draw a thick, red line and don't cross it. She's disqualified. You're not. You don't discuss any private customer information with her. So . . . what could possibly go wrong with that scenario?
Colorado Court Shuts Down FINRA Over Expungement Confirmation (BrokeAndBroker.com Blog)http://www.brokeandbroker.com/3981/finra-confirmation-expungement/You ever go to a meeting where it seemed that everyone showed up on time, they started the presentations at the designated hour, and then, just as things began to roll, some idiot executive walks in late? Can someone please get me a cup of coffee, two sugars, a little milk, and, if there's a warm cheese danish left, I'll take that, otherwise, I'll take anything with cinnamon. Oh, where's the nearest outlet, I need to plug in my phone. Thanks -- please, don't allow me to interrupt anything. Did we already cover Item One in the agenda? You did? Sorry but could you just catch me up, briefly. Did we place orders for lunch yet? Yeah, there's always that idiot. Speaking of idiots arriving late and messing things up for everyone, consider a recent FINRA expungement arbitration in which the industry Claimant wins but FINRA decides to intervene by way of a partial objection in court to the confirmation of the award.
You know how you plan for months for a big party and then you send out invitations, and some folks don't get back with a "yes" or a "no" and others ask if they can bring a guest and then, the day of the party, there's a hurricane, so virtually no one can get to your house and even if they did, the caterer couldn't make it, and, of course, a few folks who told you that they couldn't come show up because they lost power to their house and figured since you were having a party and you had asked them that they may as well show up given how the storm had forced them out of their home? Yeah, I know, we've all been through that, right? Anyway, so . . . we got this FINRA arbitration in which a customer is seeking some $108,000 in losses and hired a lawyer but then his lawyer withdrew and a lawyer for some respondents withdrew and some of the respondents either got dismissed or filed for bankruptcy or got expelled by FINRA and then the public customer asks FINRA for help and, well, you've heard that whole thing before, right?
It seems that each week there are increasing numbers of arbitrations filed with FINRA seeking expungement of various matters from a registered rep's industry record. Must be bringing in a nice chunk of change to the self-regulatory-organization via filing fees, membership fees, hearing fees, and the like. Of course, given the explosion of such cases, we should also be asking if these matters truly belong before an arbitration panel and not within the regulatory framework. Why is it that so many disclosures are being deemed non-disclosable? Why are so many allegations being questioned and rejected? Should there be more scrutiny of customer allegations and employer claims before they are carved into a industry employee's record? Should we be concerned that too much is being removed from the public record? Is anyone asking either of those questions?