Blog by Bill Singer WEEK IN REVIEW

September 3, 2016

It may well be a legal puzzle that only a lawyer can love but, nonetheless, any serious Wall Street participant (customers and industry members alike) should take the time to read about a public customer case, which actually settled, but still managed to wind up in an appellate court.  Following the settlement of a public customer's claims in a FINRA Arbitration, an expungement hearing was held. The public customer complained about not being heard. Royal Alliance Associates moved to confirm the award in Superior Court of Los Angeles County. That sort of backfired when the Court found that the FINRA Expungement hearing was conducted in an unfair manner. After the lower court vacated the arbitrators's Award, the California Court of Appeal has affirmed. An oddball aspect of this case is that FINRA winds up arguing that its arbitrators didn't act properly. Like I said, you may have needed to go to law school to fully appreciate the nuances of this mess but I'm guessing that lots of folks will still appreciate the ramifications of this somewhat historic ruling. READ FULL TEXT OPINION

By Elisabeth Miller, Managing Partner, Milava Consulting

The good news is that financial services are one of the top performing industries regarding cyber security. Your firm should realize that cyber security is not always someone on the outside, but trusted insiders could also be a threat. Additionally, a middle ground of software suppliers and contract workers have increased access to your systems without being fully inside or outside the firm. Here are some things to remember. READ

It all came crashing down onDaniel Christian Stanley Powell and he is now an inmate in federal prison, doing time for his brainchild of a scam involving purchasing life insurance policies.That's bad enough. What's worse is that when it finally comes time for the Securities and Exchange Commission to decide what needs to be done to protect the public from this guy, well, you're not gonna believe this, but the federal regulator couldn't reach inmate Powell by telephone. And then three months went by. And then the esteemed barrister Fielding Mellish appeared in court and presented his stirring argument. READ

Sit down next to me on the bench. Grab that oar. Pull. Pull again. Keep pulling as we join the forces leaving Greece for Troy. I'm thinking that we should be back by the end of the week. No way this is going to take much longer than that to sack and pillage the pesky city and its annoying residents. Frankly, I'm looking to getting home in time to watch the Olympics on television but for the fact that there isn't any television, at least not yet, but there is that rather talkative fellow Homer who tends to make his rounds and I understand that he will be broadcasting some of the Olympic events. Hey, no slouching there, pull. 

And thus begins our voyage of a FINRA public customer arbitration through a federal district court and onto the shores of a federal circuit court. The Iliad? The Odyssey? Gilligan's Island? Hey, what can I tell you . . . sometimes things don't go as smoothly as you hope. READ 

According to United States of America, Plaintiff,  v. Robert Leslie Stencil, Daniel Thomas Broyles, Sr. and Kristian F. Sierp, Defendants (Bill of Indictment, 16-CR-221; August 18, 2016), Defendant Sierp operated under a fake name from a telemarketing call center that he owned and operated in Costa Rica. The juxtaposition of "fake name" "telemarketing call center" and "Costa Rica" ain't three things in common that you want to learn about after you've made an investment. For their alleged roles in a $2.5 million high yield invest fraud, the three Defendants were charged with one count of conspiracy to commit wire fraud and mail fraud;five counts of mail fraud;  and eight counts of wire fraud. Additionally, Defendants Stencil and Broyles were charged with two counts of money laudnering; and Defendant Sierp was charged with four counts of money laundering. READ