September 22, 2018
Today's BrokeAndBroker.com Blog covers the saga of David Adam Elgart. who had become the President and Chief Compliance Officer of FINRA member firm Sequoia Investments, Inc. Elgart ran into some financial difficulties in the form of tax liens, which were required to be timely disclosed on his Form U4. After a contested hearing, FINRA found, in part, that Elgart had willfully failed to timely disclose the liens and hit him with thousands of dollars in fines and months of suspension. Willfully? Fuggedaboutit, the office know-it-all tell you while holding court at the water cooler. Just pay the fine, do the time, and, no big deal, who gives a crap about that willfully thing, another fancy word, when the suspension is over, you go back to work. Except you can't go back to work! As with so much legal advice dispensed by non-lawyers around the office water cooler, it turns out that after Elgart pays the dollars and sits out the months, he's statutorily disqualified from further participation in the industry.
Presented in today's BrokeAndBroker.com Blog is a dispute in which two former Citigroup Global Markets customers sued the brokerage firm for trades that were recommended in 1999 when they had accounts at Merrill Lynch. In 2000, the customers transferred their accounts to Citigroup, when the stockbroker joined that firm -- he remained there until 2002. So . . . when do you think it's too late for the customers to sue Citigroup if they had complaints about the handling of their accounts?
If the truth were known, many of these uber finance bros would to be eating at Forlini's -- while being prosecuted! I know they won't be, but I still wonder if they feel uncomfortable and disconcerted, even a little. Do they worry, as they rate each other's tables, that the weight of student loans is preventing millennials from starting families and buying homes? Or that wage earners and nations alike can only get by on borrowed money? Or that almost half of corporate debt is barely better than junk-rated? Including that of most of the companies that produce the cheap fracked oil we depend on, but who can't seem to turn a profit? Or that every single bit of it rides on interest rates that have nowhere to go but up?
The SEC isn't ready to make nice with a whistleblower who was tardy. Turns out, the SEC is a very punctual place. They keep time. Meticulously. A cynical fellow might call out the SEC as a hypocrite. A sarcastic fellow might compliment the SEC on never missing an opportunity to miss an opportunity when it comes to aggressive, timely regulation of the too-big-to-fail. A fellow with a sense of humor would hoist the SEC with its own petard -- which is what today's BrokeAndBroker.com Blog attempts to do.