There are times when I swear that FINRA's rules were drafted by Franz Kafka. For those of you unfamiliar with the author's works, he's the guy who wrote "The Metamorphosis," which is a story about salesman Gregor Samsa, who goes to sleep one night a human being and wakes up the next morning a giant insect. In a recent FINRA arbitration, we come across another salesman who went to sleep one night with a sterling reputation and awoke to find out that he had a dreaded FINRA "record." The thing is, just like Samsa, he hadn't done anything to cause his condition.
In ancient maps, uncharted seas were drawn infested by dragons, sea-serpents and other monsters -- so you'd know if you went there, you'd gone too far. The past week has us feeling adrift in just such waters. I won't add to the voices decrying the careless alarmism that encourages violence. I don't disagree, but I've nothing to add. Neither do I dispute those who say that people, not guns, kill people. Guns make it a lot easier, but sure. And, yes, we will always be at risk of the random demented, though it seems blasphemous to treat a mass murderer as if he were an earthquake or meteor.
In today's BrokeAndBroker.com Blog we literally got it all. We have a fraudulent real estate company that apparently crashed and burned. We got a brother touting that company as an investment to his sister, a financial advisor, who, in turn, apparently touted it to her customers and her father, who lost a bundle. We got a criminal prosecution. We got a FINRA arbitration. We start off with a lawsuit in state court but wind up in federal court, and from there in federal appeals court. We got all sorts of allegations and defenses about prosecutorial misconduct and failure to supervise and statutes of limitations. It's exhausting to read through it all. It was equally exhausting to research the facts and write it up. I would suggest you get a strong, black cup of coffee before you start reading. While you're up, maybe get a donut -- why not?
In a recent federal lawsuit, we're on the third version of the Complaint and facing yet another motion to dismiss. As the parties wend their way from the United States District Court for the Southern District of New York to the United States Court of Appeals for the Second Circuit, Defendant E*TRADE contests allegations that it had violated the duty of best execution. Is the third time the charm? Do you get a third bite of the apple?
That's the headline. It doesn't depict the enormity of the tragedy. To put it another way . . .