Blog by Bill Singer WEEK IN REVIEW

June 17, 2017

If my aunt were a man, she'd be my uncle.That saying perfectly addresses the predicaments of many of my clients. If only the firm didn't have that policy, I would have been able to do what I did. If only the client hadn't died the day before, she would have authorized the trade. If only you were cheaper, I could afford to hire you as my lawyer.

In a recent FINRA regulatory settlement, a husband and wife seeking a bank loan apparently mused that if only they had more money in their securities accounts, the bank might be more disposed to extend a loan. You think? After the couple put their flawed plan into action, FINRA responded with a fine and suspension. READ 

Starting in June 2013 and running somewhere into January 2017, millions of shares of unregistered pennystocks were allegedly sold without the necessary due diligence. Additionally, Suspicious Activity Reports likely should have been but were not filed. Although the shares may have sold for mere pennies, the proceeds amounted to just shy of $25 million. Not exactly chump change. All of which prompts a Securities and Exchange Commission investigation and the scheduling of a full-fledged regulatory hearing. In keeping with the august tradition of the Blog, we focus on the silliness that is often attendant to such regulatory enterprises of great pith and moment. READ 

Consider a recent FINRA Arbitration Decision in which the investing public and industry are treated as mushrooms: kept in the dark and fed . . . ummm . . . fed . . . okay, I'll clean it up . . . fed "crap." It seems that an employment dispute arose between UBS and a former employee, who sued the firm and sought about $182,000 in damages plus costs and fees. Two of the three FINRA arbitrators found for UBS.

What was the dispute about? Oh, the Claimant and Respondent may have had some kind of disagreement or not or possibly or possibly not. Why did two of the three arbitrators dismiss the employee's claim? Because they said they so. How come? They don't share their rationale with us.

All of which explains why I am fed up with the lack of any substantive progress by the self-regulatory organization to redress long-simmering issues that scream out for reform. Endless Notices seeking comment, endless subcommittees and blue-ribbon panels, endless white papers and reports are not chipping away at the massive glacier of inappropriate industry special interest and privilege. What doesn't stop is that investors and industry employees -- real life, flesh-and-blood men and women -- continue to get chewed up and spit out by an unfair mandatory arbitration system maintained by a non-responsive self-regulatory organization. Consider today's featured case. READ 

If you were to waltz yourself into one of Wall Street's compliance departments, you would find a whole group of folks pondering the ramifications of far too many stockbrokers' ideas about what constitutes "customer service." Sometimes, the bad guys are just bad guys; other times, it's more nuanced: You sort of appreciate that the misconduct began as well-intentioned customer service but, geez, what the hell was he thinking? In today's Blog, we sort of know what the hell the stockbroker was thinking but like the compliance officers that were left to clean up this mess, we're partially puzzled and (if we're being honest) partially amused. READ