June 9, 2018
Big problems often arise from small problems -- it's the mushroom effect. How often have you found yourself in a mess that you never quite saw coming? When you trace your steps back to see where it all went wrong, you often come to rest at some mundane, innocuous moment. In an ongoing SEC administrative proceeding, Ground Zero appears to have been nothing more than a lawyer representing a brokerage firm and its employee during a customer arbitration. As it developed, the employee had engaged in some misconduct, which gave rise to allegations that the firm had failed to supervise her, which gave rise to the SEC initiating administrative proceedings against the firm. As that supervisory case makes its way through the SEC, lo and behold, the federal regulator seeks to disqualify the lawyer who represented both the firm and the employee during the customer arbitration -- the firm wants that same lawyer to defend it against the SEC's charges. Is the lawyer conflicted? Did the employee previously waive any future conflicts? Should the lawyer be allowed to cross examine his former client? All that and more shall be revealed on the pages of today's BrokeAndBroker.com Blog
In today's BrokeAndBroker.com Blog we watch a Wall Street career short-circuit, fizzle, and burn out following allegations that the registered person was charged with felonies for using gift cards procured from stolen information. As much as we would like to dismiss this as a very rare and isolated scenario, FINRA continues to publish settlements involving similar fact patterns. Enough is not always enough. An honest living is not always the goal. In the end, it's hard to understand what motivates someone to stray off the path when the consequences are so onerous and the benefits seem absurdly paltry.
The Imposter, The Signature, The Unregistered Associate, and a FINRA Bar (BrokeAndBroker.com Blog)
In today's BrokeAndBroker.com Blog we come upon the sad tale of an unregistered associate who sought to go the extra step -- the extra mile -- in terms of customer service. When a brokerage customer encountered delays in transferring his account, the associate did what she needed to do in order to break the logjam. In hindsight, she was a tad over zealous. Making matters worse, she lied to FINRA. Alas, it does not end well.
A little known and fairly useless fact is that in 1971, rock band Grand Funk Railroad (which is to be confused with the same band by the name of Grand Funk) sold out 55,000 seats at Shea Stadium in 72 hours whereas the Beatles' 1965 Shea concert took weeks to sell out. What does that have to do with Wall Street regulation? Frankly, I think the connection is fairly obvious. If you don't quite see it, though, please read today's BrokeAndBroker.com Blog.
2 Lies To FINRA Add Up To 1 Bar (BrokeAndBroker.com Blog)
With some folks, it just seems that their luck runs out. After a remarkable run beset with almost losing one's balance, almost falling down, almost getting hit by a falling something or other, almost not getting over an obstacle -- at some point, it ends short of the finish line. No prize. No trophy. Just another also-ran. In today's BrokeAndBroker.com Blog we look back on the career of one stockbroker who almost made it through the Wall Street obstacle course. Perhaps figuring he had several cat lives left, our contestant lied to FINRA and then lied to that regulator again. Not a smart idea the first time. Not a smart idea the second time.