Blog by Bill Singer WEEK IN REVIEW

June 10, 2017

Consistency is the hobgoblin of small minds.

Ah yes, that famous line we learned in high school and trot out when we need to sound smart. The thing about famous sayings, though, is that most folks don't quite remember the actual words. The other thing about famous sayings is that they tend to get wrongly attributed to many authors.

I once heard someone explain that a "hobgoblin" was a type of boot and that the saying meant that consistency was like a worn boot that doesn't fit well and gives you a headache. Okay, that's one explanation. Except, you know, a hob-nail boot is not a hobgoblin. Yes, hobgoblins might wear hob-nail boots but that's irrelevant -- and, yes, an irrelevant is a large gray pachyderm that's not feeling well. READ 

In keeping with the desire to provide the FINRA Small Firm community with the best possible candidates for the 2017 Small Firm Governor's seat on the Board, the Blog continues its policy of offering free space to all candidates to post a comment, biography and petition/ballot. Last year, we featured messages, biographies, and petitions/ballots on behalf of Small Firm candidates Robert Muh (the victor / endorsed by Bill Singer), Robert Keenan, and Stephen Kohn. I look forward to working with all 2017 candidates and making common cause. 

Jim R. Webb, Chief Executive Officer of Cape Securities, Inc., is seeking election as a 2017 FINRA Small Firm Governor. Jim and I had an excellent telephone conversation in which we introduced ourselves and discussed our views concerning FINRA's Small Firm community. In particular, we found ourselves in agreement on the need to cultivate fair-and-effective regulation that does not fall disproportionately upon smaller member firms. I look forward to working with Jim in the future and making common cause. 

With Stephen Kohn and Jim Webb, the FINRA small firm community now has two very capable, sincere, dedicated, veteran candidates for the 2017 FINRA Small Firm Governor seat. Get to know your candidates. Make your vote and voice count!   READ Webb's Message and Download his Biography and Petition

A recent FINRA regulatory settlement presents us with the case of a registered representative who entered allegedly false information into his firm's customer database and also engaged in improper Time and Price discretion for one account. Industry participants will learn some valuable lessons from this settlement and should take note of the issues raised. Unfortunately, Blog publisher Bill Singer, Esq. takes issue with what's not set forth in the published settlement. Hopefully the good folks at FINRA will consider Bill's critique and respond to it in a constructive fashion. READ 

BREAKING NEWS: SEC Loses Supreme Court Kokesh Disgorgement Case 

On June 5, 2017, the United States Supreme Court ("SCt") issued a unanimous Opinion in Kokesh v. Securities and Exchange Commission and reversed the Court of Appeals for the Tenth Circuit. The Opinion clarifies that SEC enforcement actions seeking disgorgement must be commenced within the five-year statute of limitations set forth in  28 U.S.C. § 2462. READ 

Like Bill, I have complained about how all FINRA member firms are judged according to an unworkable one-size-fits-all standard. Also, we agree that the present Board is a dinosaur that needs to be relegated to the regulatory graveyard. Among my colleagues in the FINRA reform movement, we have often grumbled about the need to form a new self-regulatory organization. While the idea is enticing, the actual cost, which would be borne by those joining, could be prohibitive; and this is not something that we could accomplish overnight. On the other hand, Bill's proposal to restructure FINRA into three divisions would avoid much of the cost and delay of starting a new SRO and would breathe new life into the old bag of bones that is now FINRA. I love the idea of restructure and reinvent! READ