Blog by Bill Singer WEEK IN REVIEW

October 1, 2016

If you're a supervisor on Wall Street, it sort of goes without saying that you need to supervise. Unfortunately, a number of folks at Wells Fargo may be having an "ah ha!" moment as they read those wise words about the mechanics of supervision. In a recent FINRA regulatory settlement, the self regulator presented us with the case of a supervisor who seems to have had trouble engaging in effective supervision. In reading through the fact pattern of this case, you may be reminded of a moth getting too close to the flame. READ

Customer Twice Victimized By Broker's Impersonation And Online Disclosure

The conduct of the registered representative featured in today's Blog was improper; by way of spoiler alert, the rep impersonated one of her customers.  The employer discharged the rep in 2014 but things sort of go off track afterwards, and we are confronted with the apparent missteps of in-house compliance and industry regulation. For one thing, the full name of the victimized customer was disclosed online -- for all to see -- for about two years! And this from a self-regulatory organization that goes to great pains to hide the disclosure of the name of a member's affiliated bank or even the name of non-member third parties. On top of that, it took two years for FINRA to settle the case even though the respondent had admitted guilt and been fired in September 2014. READ

NY Life Rep Crosses Arbitration Rubicon With Expungement Case

A former registered representative sued his former employer for six figures in damages. The causes of action were impressive. The Financial Industry Regulatory Authority's online BrokerCheck disclosed negative comments about the reasons for the challenged discharge but there were also some mitigating explanations included. Ultimately, the former employee came to the shimmering waters of the Rubicon and decided to cross. Was that the right decision in foresight and hindsight? Read today's Blog and decide for yourself.

Sportspicks.Com Founder Lose FINRA Regulatory Wager

In and out. On and off. Registered and unregistered. There are points and counterpoints to many things in life and on Wall Street. There are things that you can do when unregistered that do not require any regulatory disclosures; but, should you return to the industry in a registered capacity, those past acts may require a current disclosure. Sometimes, things may slip your mind and you commit an inadvertent violation; other times, a regulator may not be convinced that your omission was simply caused by forgetfulness or misunderstanding. The difference between an inadvertent and an intentional nondisclosure may be the difference between staying in the business and being tossed to the curb. See how this all comes together in a recent FINRA settlement. READ

UPDATE: SEC Settlement Gives Respondent 168 Years To Pay

We are regularly bombarded with press releases heralding some purportedly profound and historic settlement or verdict.  Inevitably, as we read through the breathless prose announcing the legal outcome, we are told that some company or individual will pay a significant disgorgement and/or a crippling fine; but the cynics among us (of which I am one) arch an eyebrow at the announced dollars because we know that such sums are not always paid in full, if at all. Consequently, what looks like a financial burden upon a purported crook may well be nothing more than a non-collectible debt or, at worse, an obligation that is laughed at by the defendant/respondent.  In a recent SEC enforcement case, the ALJ found that the respondent demonstrated that, at most, he could pay $20,000 towards his $3.356 million financial obligations under the settlement. Now if only we could be sure that the respondent will live the 168 years required to satisfy his debt!  READ

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