Blog by Bill Singer WEEK IN REVIEW

March 14, 2015

Ya got a left hand. Ya got a right hand. Talk to enough folks who work at brokerage firms and you will often learn that the left hand (fill in the name of a department) frequently doesn't know what the right hand (fill in the name of another department) is doing. When this disconnect really gets bad, the word around the firm is that management doesn't know jack about what goes on in the back office or branches. In a recent FINRA regulatory settlement, it appears that the self-regulatory organization was concerned that the men and women in a member's Compliance Department and in its Payroll Department were't exactly on the same page when it came to communicating about disclosable events.  READ

It's an old story on Wall Street. Employees get happy feet. Sometimes it's a short honeymoon and the relationship falls apart quickly; sometimes it's more akin to the seven-year itch. Whatever the circumstances that prompted the break-up, it's often a matter of corporate culture as to how the end plays out. As I see it, an enlightened employer will appreciate the contributions of a top producer and wish him or her well with their new job -- always leaving the door open for a return and maintaining a collegial atmosphere to the end. Other employers view the departure of an employee as the opening volley in a scorch-the-earth war. In the biz, you have employer firms that fall into each camp. There's the departing handshake or the overhand right.  Consider this recent FINRA arbitration that pits Charles Schwab & Co. against three former employees. READ

Today's Blog is less about the facts in an underlying Financial Industry Regulatory Authority ("FINRA") regulatory case and more an examination of the mechanism by which the self-regulatory organization's ("SRO's") Bar is "stayed" pending an appeal to the Securities and Exchange Commission ("SEC"). Although the appellate path from FINRA to the SEC and ultimately the federal courts may hold out much promise, a critical consideration for those who have been hit with long suspensions or bars is whether they can continue to pursue their industry careers during the pendency of the appeal.  If a Stay of the challenged SRO sanctions is not ordered by the SEC, individuals often find themselves unable to afford ongoing legal representation with their financial lifeline cut or, in the alternative, the winner of a Pyrrhic victory if they ultimately prevail on their appeal but find that their book of business has evaporated during the time it took to win a reversal or remand. READ

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In today's Blog we consider an arbitration featuring a customer who is not actually a customer but somehow deemed one, but, no matter, because she's being sued by a registered representative, who apparently was never assigned to handle any of her business. Then we have some companies over which FINRA's arbitration forum has no jurisdiction but those entities are involved, in a way, sort of . . . maybe? Finally, the non-customer customer filed some kind of a complaint about a promissory note, which may or may not have existed, but no one seems to have proven that condition; and, for an extra dose of idiocy, the non-customer customer apparently sued over the note but she didn't have any legal right to do so.

Hello . . . how are you?  Fine?  Oh, that's nice. Listen, sorry for this early interruption and digression but I wanted to give you a head's up. The FINRA Arbitration Decision that I'm analyzing struck me as among the most mystifying that I have ever read. Keep in mind that I live a pathetic and lonely life during which I literally read virtually every published FINRA Arbitration Decision; and, as such, for me to cite a particular Decision as among the least intelligible that I've ever read is a notable if not dubious honor. So, come with me, Abbott and Costello, and the Marx Brothers as we all slide down the rabbit hole and journey to the Twilight Zone. READ