Blog by Bill Singer WEEK IN REVIEW

March 5, 2016

Today's analysis of a Financial Industry Regulatory Authority starts off with a consideration of the shortcomings of a Chief Compliance Officer. The Blog considers what happens when a brokerage firm purchases an email review system but, oh well, someone didn't actually do what was required to implement the third-party product. The article ends with an exaltation of Murphy's Law and a bit of rambling and musing by our publisher Bill Singer. READ

Oh!!! Unauthorized Trading, Patti O'Furniture, And FINRA's BrokerCheck

Once again the gaze of the Blog falls upon a Financial Industry Regulatory Authority settlement involving a stockbroker who got a verbal go-ahead from some customers to exercise trading discretion. Unfortunately, as we have written with some regularity, oral discretion is often worth the paper it's not written on.

Oh, and another thing, FINRA seems to have lost today's featured Respondent in their high-priced, highly-touted  BrokerCheck database. Oh my!  But, don't fret, oh no,'s publisher Bill Singer has solved the puzzle. Oh, say can you see? Okay, Bill did. OMG, it was quite a hunt to figure out what was wrong In the end, it came down to an "O" and an apostrophe. You may enjoy reading about Bill's hunt and chase, which lasted into the wee hours of the evening. Oh, what a night! READ

What we know about today's Blogregulatory case comes from a published, public document that appears on the website of the Securities and Exchange Commission ("SEC"), one of Wall Street's regulators. The odd thing about the securities industry's cops (federal, state, and self-regulatory) is that they have this penchant for not always naming names. Read enough published regulatory records and you are bound to come across references to Informant Xor Jane Doe or an unnamed entity referred to as the Broker Dealer or the Hedge Fund. Some say that this hide-and-seek approach to disclosure encourages tipsters and informants to come forward knowing that their identities will be hidden. In those cases, that's a sensible and appropriate policy. In other cases, however, queries as to why names aren't named elicits the standard rebuff of: It protects the innocent.

Those charged with writing the lexicon of regulation have a very generous nature when it comes to the term "innocent." One would think -- would hope -- that when there is tension between serving the interests of public investors versus those of, say, the securities industry or participants in the overall financial marketplace, that deference would be given to the needs of public investors. The troubling thing about that hope is we keep seeing evidence that the scales are not always balanced. Someone's fat thumb seems to find its way into the weighing. Consider today's case. READ

LPL Loses Dramatic Employee Defamation Case

Today's Blog features a peculiar case, or, perhaps, it would be better to characterize the circumstances as involving one registered representative and two cases. In the left ring of the Wall Street Circus, we have a FINRA arbitration. In the right ring, we have a FINRA regulatory settlement. In the center ring, we, have a FINRA BrokerCheck record. The problem is that the wild beasts and acrobats are not acting with the greatest of ease and we, the audience, are overwhelmed and confused. READ