Blog by Bill Singer WEEK IN REVIEW

August 26, 2017

What's The Frequency FINRA?

Y'all remember that Blog article we posted a few days ago with the public customer Claimant lawyer who went up against a FINRA member firm that had been expelled and that did not answer his claims or appear at the hearing? As you may recall, the Claimant's claims were denied but we had not explanation as to why. In today's blog, we consider yet another lawyer's complaints, these on behalf of his and another's IRA accounts. Yet again, we encounter some oddball moments in the wild and wacky world of FINRA arbitration. READ

Sewage Release By Wall Street Regulators

You ever notice all the self-congratulatory garbage that flows out of Wall Street's regulators -- sort of like the release of raw sewage after a storm. And there's so much of it! You got state-of-the-art regulatory websites. You got snazzy regulatory social media pages. You got high-quality-production-value videos, webcasts, and podcasts. You the lecture circuit where one top exec or one top commissioner stands before a select audience and extols how effective they've been while, ever so sincerely, acknowledging that we can and should do better. Been a pleasure addressing you all today. Sorry, gotta run and catch my flight.

Oh, and let's not forget those endless notices from regulators asking for yet another round of comments and suggestions, which then get processed, then get considered, then get submitted to a panel, then get revised, then get re-submitted for comment, then get revised, then get formally submitted, and, then, if a commission or Congressional committee ever signs off, may or may not get implemented by the new exec or the new commissioners who replaced the old exec or the old commissioners who started this process a few years ago. 

As you read the self-serving communications and listen to the self-serving speeches, you are struck by that feeling of deja vu. If you've been reading and listening to this nonsense as long as I have, it's deja vu all over again, and again, and again. How about we all get real? Let's be honest with each other. The spirit is willing but the flesh is weak. READ

Split 2nd Circuit Affirms Martoma Conviction

Following Newman, Martoma challenged both the sufficiency of trial evidence and the jury instructions. Pointedly, Martoma disputed that there was a "meaningfully close personal relationship" between him and Dr. Gilman. Similarly, Martoma argued that Dr. Gilman did not receive and gain of a pecuniary or other valuable nature pursuant to providing allegedly confidential information to Martoma. Finally, Martoma underscored that the jury instructions did not properly inform the jurors about the "personal benefit" standard enunciated in NewmanREAD

Newman And Salman Come Into Play With Conradt Appeal

Stripped down to basics, Conradt had entered into a Consent Judgment and, thereafter, either out of remorse or a belief that his agreement was procured based upon now-reversed law, Conradt sought to have the judgment vacated. In fairness to Conradt, he had pled guilty in a parallel criminal case and that plea had been vacated based upon Newman considerations. Exacerbating Conradt's appeal were findings that he had breached his cooperation agreement by not fully cooperating with the government and not being truthful in aspects of his alleged cooperation. READ

FINRA Public Customer Arbitration Decision Becomes A Legend

For those of you who love mandatory customer and industry arbitration before the Financial Industry Regulatory Authority ("FINRA"), I am pleased to present today's analysis of a recent public-customer arbitration. Without question, this case presents FINRA arbitration in a very favorable and compelling light. Unlike many cases that fail to offer readers sufficient content and context so as to render them comprehensible, this decision speaks for itself. Speaks volumes about the benefits of alternative dispute resolution before FINRA. No question about it: I've been wrong in my criticism of forced arbitration. Wrong for years. Clearly, I've been confused and misguided. I'm sorry. I apologize. After you read today's Blog, I'm sure that you will recognize mandatory FINRA arbitration for what it is. Contrary to my years of doubts, you will be able to precisely explain why this particular panel of arbitrators ruled as they did. The facts compelled their award and you will be able to rub my nose in such an obvious outcome. More to the point, if anyone should ever ask you to explain this specific FINRA Arbitration Decision, you will being your answer with the preface that notwithstanding the erroneous views of that moron Bill Singer (what a jerk!), this is a slam-dunk of an arbitration replete with sufficient content and context so that anyone with half a brain (which I don't think that Singer fellow has) could tell you what happened here and why the arbitrators made their rulingREAD

STEPHEN A. KOHN Wins Three-Way Race For 2017 FINRA Small Firm Governor

It is with great pride and pleasure that I announce that on August 22, 2017, the Financial Industry Regulatory Authority ("FINRA") announced that Stephen A. Kohn, President and CEO of Stpehen A. Kohn & Associates, Ltd. was elected as the 2017 FINRA Small Firm Governor.  Stephen has demonstrated a persistent and consistent record as an unabashed advocate for industry reform and effective regulation. He sought election as the 2017 FINRA Small Firm Governor in order to make sure that someone fights for the legitimate needs of FINRA's besieged small firms. Time and time again, Stephen Kohn steps forward when others hang back. Time and time again, Stephen speaks up when others remain silent. READ

Zombie Customer Complaint Will Not Die After 35 Years

Among my more common reactions to lawsuits is a simple question: What the hell were they thinking?  That query covers a whole host of sins. What the hell were the defendants/respondents thinking when they did that stupid thing that they are charged with doing? Why is the plaintiff/claimant filing such a weak complaint? Why didn't the innocent and wrongly named defendant/respondent file a counterclaim for monetary damages? Why didn't the defendant/respondent settle this indefensible case before getting hammered? Why did the triers of fact rule in the idiotic way that they did? How did they come up with that inexplicable monetary award?  

Recently, I was overwhelmed with questions about why a FINRA Arbitration was filed, why there was no counterclaim for damages, and what the hell was really going on behind the scenes. I just couldn't believe that this particular case was filed in 2016 and adjudicated in 2017. See what you think. READ

Stifel Prevails In Arbitration But Former Hilltop Employees Hit With Awards

In January 2016, Hilltop Holdings Inc. announced that it had merged its broker-dealer subsidiaries First Southwest Company LLC and Hilltop Securities, Inc., which effectively folded the former Southwest Securities Inc. into Hilltop Securities. Inc. As is often the case when such mergers are first rumored to be happening, and, then, when they are confirmed and, thereafter, when they are finalized, some registered representatives get happy feet. Sometimes, the motivation to move on had been simmering for a long time. In other circumstances, employees of the old firm don't particularly like what they see in terms of the likely new firm. And, just as often, when change is in the air, it simply proves contagious. In a recent FINRA intra-industry arbitration, former employer Hilltop Securities seems to have been angered by the departure of six employees and not all that thrilled with the conduct of their new employer Stifel, Nicolaus. A multi-million-dollar lawsuit ensued. READ