Blog by Bill Singer WEEK IN REVIEW

June 11, 2016

In response to the indefatigable efforts of Securities and Exchange Commission Administrative Law Judge Cameron Elliott to conduct a statutorily mandated hearing in the public interest to determine whether to bar from the securities industry a federal inmate who is serving a 300-month prison sentence for his role in an $11-million securities fraud, Federal Bureau of Prisons bureaucrats have pursued a hostile course of conduct, which smacks of petty bureaucrats peeing on their turf in a childish effort to mark one's territory. 

DEMAND that the Federal Bureau of Prisons and the Securities and Exchange Commission require inspector general investigations of this reprehensible state of affairs. 

CONTACT your Senators and Representatives and demand that they haul the asses of the imbeciles responsible for this idiocy before a congressional committee and demand accountability.

COMPLAIN to the:

Federal Bureau of Prisons 


Securities and Exchange Commission ("SEC") Chair Mary Jo White 

Today's Blog is an appeal to all serious Wall Street professionals and public customers: I want you to make some time to read a law review article. Yeah, I know, that's all sooooooooo old school to have to sit down and manually read 68-pages of prose with this snore of a title: "Note: High Frequency Litigation: SEC responses to high frequency trading as a case study in misplaced regulatory priorities"(The Columbia Science & Technology Law Review; Author Nathaniel E. Sokol, Vol. XVII, Spring 2016). READ

If nothing else, many lawyers love a good word puzzle. Countless millions of dollars -- dare I say, billions or trillions? -- have been spent in litigation over the meaning of a paragraph, sentence, clause, or even a single word. Quite often, the battle lines are drawn when there is a commonsense, everyday meaning for a particular term but there is also a whole other definition set forth by the courts and common law. For those of you done with today's crossword puzzle, let me offer you another bit of diversion. How would you define the core difference between a regulatory Bar and a regulatory Suspension? Many would answer that a Bar begins on a date certain but does not end on a date certain; whereas, a suspension begins on a date certain and ends on a date certain. In more understandable terms, the general idea behind a Bar seems to be that you're out of the business until someone allows you back in, which may never happen; and the concept of a suspension is that you can come back in the business after you've served the requisite days, weeks, months, or years. The problem, however, is that some securities regulators impose multi-year Bars. Another problem is that some suspensions result in what is essentially the "bar" of a Statutory Disqualification. Like I said, lawyers with big-dollar billable hourly rates love this stuff. Consider this recent petition to the Securities and Exchange Commission by a barred individual. READ

In my role as a lawyer for individual registered representatives, I am frequently presented with questions about what happens to deferred compensation when an associated person quits or is fired by a FINRA member firm.  For many years, my answers were pessimistic because of a body of arbitration and court decisions that had imposed considerable barriers against obtaining disputed deferred compensation.  I'm not talking about cases where the deferred compensation had clearly and unequivocally accrued and been fully earned but, rather, in circumstances where some portion of deferred comp had not vested or the employer was arguing that actions by the former employee had nullified any obligation to pay such compensation. In such heated disputes, the scales appeared heavily weighted in favor of the former employer. Following the onset of the Great Recession, however, the relative positions of the deferred compensation scales are not as favorable to former employers as in decades past. Yes, the scales still seemed tipped towards the employer but perhaps less so than we are used to seeing. In an odd version of the deferred compensation dispute, we had a recent FINRA arbitration in which a former employer alleged that he had sustained damages when his former firm had failed to enroll him it its deferred compensation program. READ

When it comes to authoring content for the Blog, I've never made any pretense of being objective or impartial.  To my credit, I try to highlight and make clear my biases, prejudices, and scorn for much of what passes for the purported regulation of the financial industry. As I see it -- as I too often see it -- we frequently entrust the inept and the inefficient with the task of policing our financial markets. In fairness, that's not an abject, blanket statement. There are many men and women who sincerely and credibly discharge their regulatory duties at any number of prosecutorial and regulatory organizations around the world. The blame falls less upon the grunts in the trenches than on those planning the strategy and tactics of battles. The agenda of too many of those in charge seems more designed to garner headlines for regulatory bosses looking to pad a resume or move higher up the ladder than to win the war against financial fraud. READ