February 8, 2020
In a recent FINRA Arbitration, an associated person Claimant sued his former firm and lost. On appeal to the federal courts, Claimant argues that two of the three FINRA arbitrators were wrongly characterized as "Public Arbitrators," and they should not have been allowed to sit (or remain) on his hearing panel. Frankly, it looks like the facts are on Claimant's side. Ahh . . . but so much for appearances. In the end, it all comes down to a question of timing.
Guest blogger Jesús Cedeño warns that with more than 6,500 cryptocurrencies and many more on the way, investors must do their due diligence to determine whether a prospective cryptocurrency investment is a scam. To help our readers in ferreting out the frauds, Cedeño compiled 10 warning signs of a Crypto Scam. A wonderful primer for those entering into this new but often fraud-plagued arena.
For many of Wall Street's associated persons, the industry's voluminous rule book is filled with new and unfamiliar proscriptions. Which might explain why so many folks tend to violate the same old rules over and over but still profess ignorance. On the other hand, c'mon, there are just some folks who view rules and regulations as challenges to be overcome and circumvented. Be that as it may, in today's blog we cover, yet again, the scenario of an industry employee who walked away from a job at a time when commissions had been paid but not fully earned, or so the former employer argued. That prompted an Arbitration. That may only be the start of the Respondent's ordeal.
Customer advocates attack FINRA's expungement process for providing the industry with an all too facile eraser of troubling complaints; whereas industry advocates attack the process as being too expensive and time-consuming. Frankly, there is merit on both sides of the divide and the mess is ripe for reform. In a recent FINRA arbitration, we see how this faulty system is taking on even more troubling dimensions.