Blog by Bill Singer WEEK IN REVIEW

December 17, 2016

Some folks learn their lessons. They learn from their mistakes. They move on and do better. Others . . . well, there are just far too many Jacks who go back and do it again. Those folks endlessly spin their wheels, round and round. All of which suggests that Steely Dan would make a great Wall Street regulator. In today's Blog we consider one fraudster who seems to have gotten stuck in the mud and, when we come across him, his vehicle is spinning its wheels but no one is going anywhere and doing so fast. READ

I am a somewhat clueless Wall Street gadfly who just doesn't seem to get the fact that I'm waging an endless and likely futile battle for reform. Then again, I love tilting at windmills. That being said, as a blogger and lawyer, I get lots of email and phone calls from defrauded investors. Many of those communications are heartbreaking because of the tales of financial devastation. Sadly, far too many victims failed to do meaningful due diligence and opted to believe in something that was too good to be true. Over the years, I've warned against such scams as Standby Letters of Credit, Bank Guarantees, and Trading Platform. Notwithstanding my repeated warnings, investors still line up to be duped by con artists; and, as demonstrated in today's Blog, the line continues to lengthen. READ

Yet another Blog installment about the need for more quality control at FINRA when it comes to its Arbitration Decisions. In today's rant by our publisher Bill Singer, Esq., we are confronted with claims of civil rights violations by a former Edward Jones & Co. employee. She seems to have won her case . . . sort of. Exactly what constituted the alleged discrimination isn't clearly explained in the arbitrators award. Then there's that whole issue about whether "disparate treatment" is the best way to describe sexual discrimination. READ

Yet another mandatory FINRA employment arbitration comes under scrutiny. This one involves ten promissory notes worth a few million dollars issued to two former Morgan Stanley Smith Barney employees. Both of the employees get sued in an effort to collect the alleged balances due. One loses. One wins, sort of. Why? Dunno. How come? Dunno. Why does FINRA persist in this obfuscation of mandatory employment arbitration decisions? Dunno -- but I have a theory. What is your theory? Not saying. Why? Cause I don't have to. Isn't that a bit childish and silly? Dunno. READ

Although Wall Street is the epitome of Capitalism, there are rules about how much a brokerage firm may charge for executing a customer's order. Depending upon whether you are a public customer or an industry advocate, you likely have very different positions on what's a fair price for a commission and what's a fair price for a mark-up or mark-down. Competing views aside, the industry's self-regulatory organization, the Financial Industry Regulatory Authority, has a specific rule addressing fair prices and commissions. As with so many aspects of regulation, the written words used to express what you can and cannot do tend to resort to broad concepts and aspirational goals, which does not necessarily result in bright lines and clear-cut guidance. Consider a recent FINRA regulatory settlement involving the pricing of fixed-income trades and note how President-elect Donald Trump inadvertently captured the essence of the issue. READ