When does a relationship between an auditor and the audit client become too close so as to cross over the line from merely a "close personal relationship" and wind up in the land of "compromising?" A recent Securities and Exchange Commission settlement shows how the federal regulator grapples with that edgy issue. More ominously, what may have passed as harmless T&E for generations may no longer pass the sniff test. READ
In today's BrokeAndBroker.com Blog, publisher Bill Singer, Esq. makes it clear that FINRA got its man dead to rights. FINRA's Private Securities Transaction Rule requires prior written notice, and that notice did not seem to have been sent. Ding goes the self-regulator's cash register. FINRA's Outside Business Activity Rule requires prior written notice, and that notice did not seem to have been sent. Again, ding goes the self-regulator's cash register. If we go by the facts set forth in the regulatory settlement, the respondent violated both rules. The discomfort arises when we examine the fact pattern and then compare the misconduct to the fine and suspension. READ
What should we infer from FINRA's nomination in June 2016 of Wells Fargo's retail chief to the regulator's Board of Governors? Would it be okay if I noted that the first thing that came to my mind was "tone deaf"?
What does it say about the state of Wall Street regulation if the industry's largest self-regulator was unaware of the developing account-opening apocalypse at one of its largest member firms? Is there no sharing of information about Wall Street's cops? Was FINRA clueless as to the ticking time-bomb at Wells Fargo when it nominated Mary Mack in June 2016?
If, on the other hand, FINRA was in the loop about the bogus account openings and understood the scope of the fraud, how the hell could the regulator have gone forward with the nomination of Mack? Was June 2016 the time and the place to reward Wells Fargo with the accolade of the only open Large Firm seat on FINRA's Board of Governors? If Mack had not withdrawn, does anyone doubt that FINRA would have elected her to a full-term as a large firm Governor? READ
For many men and women employed on Wall Street, getting fired is more than the mere loss of a job. Depending upon how the firing is memorialized in various so-called regulatory disclosure documents, a discharge could be the end of a career. If you're one of the "lucky" ones who got fired because of nothing more onerous than corporate downsizing or the closing of an office, those factors may not pose much of an issue during interviews for your next job. On the other hand, if you resigned amid a cloud of allegations of misconduct or were terminated for cause, potential employers may have all sorts of questions; and even if a manager recommends your hiring, the suits upstairs in legal and compliance may put the kibosh on any offer. Given the costs and time involved in fighting what is often called a "wrongful termination," many industry employees simply sulk off into a corner to lick their wounds. For some disgruntled employees, however, righting the wrongs of their discharge becomes the legendary "matter of principle." In a recent FINRA arbitration, one former PNC employee girded for battle and several windmills are all the worse for the encounter. READ
Let's face it, these days, there just ain't a lot of folks all that sympathetic to the plight of a stockbroker. And while we're on that topic, let's also be honest: Wall Street made that bed and it's tough to scrounge up much, if any, sympathy for an uncomfortable night's sleep for the hundreds of thousands of registered representatives in the financial services community. On the other hand, let's all agree that we live in a world of unfairness and injustice and the greatest challenge of all is finding a way to right the wrongs suffered by the least popular among us. All of which comes off as yet another insufferable public service announcement, which I routinely sneer at when it interrupts my all important sporting event on television. So much for truth, justice, and the American way. In any event, consider this recent litigation against PNC and Wells Fargo seeking the clearing of one registered rep's name. READ
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