A new FINRA Regulatory Notice asserts that there is a "long history of bad actors exploiting" microcaps and pennystocks. Sadly, FINRA thinks that merely urging its member firms to review their policies and procedures is going to weed out the bad actors. All of which makes you wonder what FINRA's 3,000-plus regulatory employees are doing each and every day?
Today's blog is a sad tale. It's about the loss of promise. It's about how one bad choice can derail a career. It's about the fear of failure. It's about taking short-cuts that take you to dead ends. Your response to today's blog will likely mirror mine: anger mixed with sadness.
A recent FINRA arbitration just doesn't seem to add up. It started in 2019 with an arbitration Complaint. The case then moved into federal court in 2020 as the litigants battled over whether the dispute belonged in court or arbitration. In 2020, the dispute is returned to FINRA, where the case is argued via ZOOM teleconferences. In 2021, the Panel issues a sledgehammer of an award, which will likely surpass $20 million in damages, interest, fees, and costs. Notably, there was a finding that JP Morgan Securities and one of the individual respondents had engaged in elder abuse. And then you look to see if the arbitrators exercised their prerogative to refer the case to FINRA-the-regulator. And you look. And look. But no such referral. $20-plus million. Elder abuse. And, yet, no referral to FINRA regulatory investigation? What more does it take. Just what am I missing here?
A recent racial discrimination case filed in federal court prompted a defendant's motion for summary judgment. In and of itself, that procedural response is not uncommon, but the court's granting of the motion was predicated, in part, upon the alleged non-disclosure of a continuing employment history on FINRA's BrokerCheck database. The Plaintiff employee allegedly disclosed that his employment had purportedly ended in 2014 but it appears to have persisted until 2018. It takes a while to digest that. Making matters even more odd, the former employer was not a FINRA member firm and the termination did not involve any securities transactions. How did BrokerCheck come into play? Ahh, now that's quite the story!