For whatever reason, regulatory decisions from the New York Stock Exchange
side of FINRA are just better written than those from the NASD side of FINRA.
Of course, by now, I thought the much promised rulebook consolidation of
those two self-regulators would have been long since accomplished, and that the promised economies of scale from merging the former NASD into NYSE would have now emerged. Alas, as with so many regulatory initiatives and promises, the merger has not gone off as smoothly as billed.
There is still a NYSE regulatory site and an NASD/FINRA site.
Nonetheless, you have to read this gem of a case from NYSE. On the surface, the Request for Review by NYSE Board of Directors of Hearing Board Decision: 08-3 January 7, 2009 seems mundane. It's a two-count case alleging unauthorized trading in two customer accounts and a second count of threatening and/or harassing one or more complaining customers and/or their family members. After the hearing and appeal, things didn't go well for this respondent: he was censured and barred for three years.
What makes this case noteworthy are the lurid details of the twelve page Board decision. If you would like a taste of how crazy things got, consider these two paragraphs from page 9 of the Decision:
In considering Charge II, the Hearing Panel found the similarities among the experiences of the three unrelated complaining customers to be significant. In the case of each complaining customer, the evidence and testimony presented by Enforcement documented Respondent's inability to handle customer complaints in an appropriate or professional manner. The Panel found Customer A's testimony regarding the menacing message left on her answering machine to be credible, and also credited the testimony of Customer D's son that he felt threatened by Respondent's comments regarding the making of a false accusation against him. In addition to the credible testimony and the police reports filed by two of the customers, Respondent admitted yelling at both Customer C and Customer D's son.
Respondent claimed that his actions were justified. The Panel finds no justification for Respondent's actions. The frequency and tone of the telephone calls Respondent placed to these three customers and their family members were unreasonable and inconsistent with the behavior that is expected of a registered representative. While the Panel recognizes that there will inevitably be disagreements and even conflicts between registered representative and their customers, there are procedures within the firms and the self-regulatory organizations to resolve them. Yelling, cursing, harassing and threatening are inappropriate and unprofessional - especially, as here, when such behavior is repeated - and constitute acts detrimental to the interests of the NYSE, which requires that customers be treated with respect, even during difficult times.
For details about the case, visit