Blog by Bill Singer WEEK IN REVIEW

January 28, 2017

From the perspective of three Wall Street professionals, the customers' arbitration Statement of Claim could have been far worse; after all, the claimants did not name by name any of the three professionals as respondents. On the other hand, Wall Street compliance policies and regulatory rules being what they are, the three unnamed individuals still wound up having disclosure documents filed about their alleged involvement in the underlying lawsuit. Sometimes you dodge a bullet only to step on a landmine. In time, the three unnamed parties got another bit of seemingly good news: The case settled between the claimant customers and the respondent employer. The foundation was laid for each of the three unnamed parties to seek expungement of the lawsuit from their industry records. The thing about good news, however, is that it ain't always as good as we think. The thing about foundations is that sometimes they're faulty and collapse. In today's Blog we consider good tidings that evaporated into a suffocating fog and a foundation that opened into a devouring abyss. Now there's a bit of cheery, dramatic foreshadowing! READ

Who is a spouse these days? What constitutes a marriage? Are Wall Street regulators proscribing conduct by married couples in similar fashion to that of other domestic relationships? Should a brokerage firm have the right to insist that employees not maintain away accounts? Talk to enough folks on Wall Street and you will get answers all along the spectrum. Presented today is a thought-piece: one that will hopefully provoke conversation. FINRA seems to be regulating properly. The stockbroker respondent seems to have evaded the rules. Still . . . there's something a bit discomforting about the wording of the rule and its application. All of which should engender discussion and debate. READ

Online FINRA BrokerCheck records for Destina Mantar as of January 25, 2017, disclose that she graduated the Ataturk High School of Science in Istanbul, Turkey in 2011, and Duke University in Durham, North Carolina in 2015. In July 2015, Mantar was employed by Goldman Sachs & Co. and in August 2015, she became registered with that firm. BrokerCheck discloses that Mantar's registration with Goldman Sachs ended in November 2015. What went wrong with such a promising career? Something happened concerning Mantar's taking of a Goldman Sachs internal skills assessment -- but as to exactly what Mantar did or didn't do isn't spelled out. About the only thing we know for certain is that she started at Goldman in July and was gone by November. Where things become far more ominous is when the Financial Industry Regulatory Authority starts asking questions, doesn't get answers, and bars Mantar. At some point, time just ran out for Mantar. Or did it? READ

You might want to call it an existential challenge. The Financial Industry Regulatory Authority has to make up its mind. Will it treat its smaller member firms the same as its larger ones? Will the self-regulator perpetuate its seemingly disparate reaction to the transgressions of its financial superstore member firms versus those of individual men and women stockbrokers? With new Chief Executive Officer Robert Cook, FINRA has a chance to hit the re-set button. One size fits all regulation is a bust. It's time to restore the partnership between the regulator and the regulated. Perhaps the first steps in fixing the broken machinery of self regulation begins with an enlightened assessment of the issues presented in today's BlogREAD

Tax season is on the horizon and it's a time when many Wall Streeters moonlight in an effort to earn some extra money or to cultivate leads to new customers. Few relationships are more cozy than those between CPAs and stockbrokers/investment advisers. Unfortunately, few relationships have caused more problems than that between those doing tax returns and those recommending investments. When it comes to such outside business activity, stockbrokers often forget the regulatory requirement to provide prior written notice to their employer. Unfortunately for those brokers speeding through the rulebook, the industry's self-regulatory organization is parked off the road with its radar gun at the ready. READ