Blog by Bill Singer WEEK IN REVIEW

July 2, 2017

Wall Street Whistleblower Johnny Burris Speaks Truth To Power

Johnny Burris is a former J.P. Morgan financial advisor who alleged that he was coerced by the bank to sell company-owned financial instruments. Burris felt uncomfortable pushing some in-house product on his customers because he found the attendant higher costs inappropriate and unwarranted. He declined to drink the corporate Kool-Aid. As he tells the story in the video presentation below, in response for trying to do what he thought was in his customer's best interests, he became a whistlebower, for which he asserts that he was fired and retaliated against. 

Burris asserts that top executives were aware of what he characterizes as illegal violations of banking laws and OSHA laws against discrimination and retaliation. He also warns that whistleblowers may find themselves in the cross-hairs not only of prominent industry firms but also of the industry's regulators. His is an unflattering view about the self regulation of Wall Street, and he raises troubling questions about strings and who is pulling them. READ and WATCH

Rep Wins Expungement Of 11 Year Old Complaint At Defunct Brokerage Firm

In a recent FINRA expungement arbitration, a registered person challenged an 11-year-old customer complaint. In the ensuing years, the brokerage firm had gone out of business and many records were long-since destroyed or lost. Talk about an uphill battle! In the end, the registered rep prevailed and how she did it and why the arbitrator ruled in her favor are worthwhile lessons. READ

FINRA Arbitrators Can't Explain

To most Wall Street observers, today's Blog's featured FINRA arbitration is a ho-hum, garden-variety dispute between an employer and employee. What often makes the Blog an edgy read, however, is the quirky viewpoint of its publisher Bill Singer, Esq. And Bill is in all his edgy glory today as he savages a mandatory intra-industry dispute. By way of a teaser, the former employee Claimant sought between $48,000 and $606,658; and the former employer Respondent filed a Counter-Claim seeking $72,083.52. How and why the panel of arbitrators awarded $8,000 to the Claimant is a mystery. Speaking of how and why, who said "I Can't Explain?" Yeah, that's right. What is? Not what, WhoREAD

SEC Settlement Cites Trading Ahead Of Research

There's no crying in baseball and there shouldn't be any tears shed on Wall Street when it comes to regulation. Frankly, much of what passes for regulating the industry seems to be a cost-benefits analysis of how much you can get away with versus what you would finally agree to pay via settlement. It all looks like checkbook regulation, which tends to favor the too-big-to-fail and disproportionately crushes the small market participants. 

In a recent SEC settlement, we have a quintessential small firm and its individual President cited for a number of violations involving trading involving non-public information. In fairness to the federal regulator, it sets forth what's pretty much an air-tight case. In fairness to the respondents, you likely did yourself a service by settling. For industry participants, the SEC's presentation of the case provides a superb opportunity to consider whether your own policies and procedures will stand up to similar scrutiny. READ

An issue that had divided the federal circuit courts was when/whether a Section 11 claim could be tolled pending the determination of a class certification. The Supreme Court has just resolved that split in the circuits. FULL-TEXT Supreme Court Opinion online at Blog with audio of argument and transcript of argument.

FINRA Buries The Lede With FAS Rep Settlement

In newspaper lingo, "bury the lede" refers the practice of reporting the news by not opening with the most critical aspects of the story. Although such a technique may build the tension in the telling of the tale, it's a disfavored approach. The result of a buried lede is often the sense that someone is "spinning" a story by deferring or downplaying the importance of events that may not necessarily advance the desired goal of the reporter or news organization. We've all rolled our eyes when a politician or spokesperson insults our intelligence by responding to an important question with a purported answer that meanders through nonsensical preliminaries and never quite gets to anything that remotely sounds like a "yes" or "no."  For lawyers, we encounter buried ledes when reading court orders, decisions, or opinions and can't quite find the part where the "guilty" or "not guilty" is stated. Not be left out of the buried-lede festivities, FINRA recently published a regulatory settlement in which the regulator sort of digs some holes and tosses in some bodies and hopes that we don't quite notice the lumps on the landscape. READ