Blog by Bill Singer WEEK IN REVIEW

June 18, 2016

OPEN CALL For BrokeAndBroker.Com Blog Guest Contributors

If you would like to pitch a Guest Blog for the Blog, please send a brief outline of the proposed article to I don't open attached files from unknown senders, so make sure that your pitch is in the text portion of the email. I welcome all views and perspectives, even when they erroneously conflict mine. Please do not send me puff or marketing pieces. I am accepting serious regulatory/legal/compliance commentary on important cases and developing issues. Also, I am seeking thoughtful observations about investing and market trends. Customer advocates and unrepentant industry apologists are all welcome. There is no compensation offered; however, I am happy to include in any article your direct contact information and professional biography, as noted in this recent offering: "The RIA Times They Are A Changin'" ( Blog, by Andrew Wels, Esq., April 20, 2016). If you can demonstrate a responsive audience for your musings, I will even consider a permanent column for you on my site. If you've got the writer's itch, scratch it at the Blog. Send submissions to:

FINRA's Arbitration Code requires that arbitration awards present a "summary of the issues." In a recent dispute brought by a former UBS Securities employee, who was awarded $2.3 million, however, Blog author Bill Singer argues that the requirement of a summary explanation was not met. It's frustrating because we are intrigued by the employee's allegations of non-payment of his deferred compensation and bonus, and of his charges of defamation and wrongful termination. Is this all the result of a misplaced desire to placate powerful industry interests or just a failure by FINRA to impose quality control? Why is FINRA's mandatory-arbitration deck so stacked against the presentation of content and context? READ

Adding to an unseemly yet unending stream of contradictory rulings going back over the years, the Internal Revenue Service now weighs in with its opinion as to whether the Financial Industry Regulatory Authority is a governmental actor, which would render the self-regulatory organization's fines as not tax deductible. To be fair, the IRS goes to some pains to admonish that its opinion is limited to considerations under the IRS Code. That's all well and fine -- except we now have a growing body of judicial and non-judicial opinions, findings, holdings, and the like in which we are told that a self-regulatory organization is a private actor, a governmental actor, and a quasi-governmental actor. Oh, and, sure, many of those assertions also throw in some limiting application. Frankly, the confusion has taken on comical aspects of absurdity and suggests that the FINRA version of Schrodinger's Cat is at any given time a private actor, a governmental actor, and a quasi-governmental actor. READ

Bill Singer On New FINRA CEO Robert Cook

The Financial Industry Regulatory Authority ("FINRA") announced that it will be splitting the roles of Chair/Chief Executive Officer Richard Ketchum, and, in furtherance of that policy, has named Robert W. Cook as its new CEO.

If given the opportunity to meet with new FINRA CEO Cook, I will reiterate my frustration with FINRA's efforts to socially engineer its smaller firms out of business. I will raise my ardent belief that the disenfranchisement of hundreds of thousands of registered men and women must end and that it is an injustice for FINRA to deny any and all voting rights to the rank-and-file participants of its community. Similarly, I will protest "mandatory" arbitration for public customers and for industry participants. Also, I will press for more dispersion of investigations and enforcement to the district level and warn against the ossification of self-regulation when it becomes a Washington, DC entrenched bureaucracy. Finally, I will offer to serve in any capacity by which I might best advance the reform agenda and by which I might advocate for those who are now voiceless at the self-regulator. READ

CCO Fined And Suspended For Missing Private Securities Transaction

Today's Blog is a warning to all compliance staff -- particularly to Chief Compliance Officers. You could be fined and suspended if you fail to navigate the treacherous waters of FINRA's outside business activities and private securities transactions rules. You may have thought nothing of having approved an outside activity; and you might have taken comfort from the fact that everything took place in writing before any actual outside conduct took place. You've got all the paperwork in your file. But what if you had approved a private securities transaction masquerading as an outside business activity? READ

In Memoriam For Orlando

Following the Orlando massacre, which left 49 dead and 53 wounded, I am not going to post an article about Wall Street on the Blog. Today, I choose to pause.

Bill Singer

Shostakovich Piano Concerto No. 2, Second Movement "Andante"
The Mariinsky Orchestra conducted by Valery Gergiev; Denis Matsuev, pianist