Blog by Bill Singer WEEK IN REVIEW

October 14, 2017

FINRA Settlement Muddies Wall Street's Regulatory Waters

Regular readers of the Blog know that our publisher, Bill Singer, Esq., regularly rails against the lack of adequate "content and context" in many regulatory documents.  As demonstrated in a recent FINRA regulatory settlement, Bill is once again on the warpath. Today's settlement involves allegations of unauthorized discretion and improper use of margin. Frankly, those charges don't really wash . . . except, okay, they do after you uncover some issues not in the AWC . . . except, to be fair, the new information isn't exactly probative or relevant . . . except you're uneasy about where you uncovered and you no longer know how to feel about the Respondent's guilt or lack thereof.  At last, you begin to understand why Bill Singer makes such a point about holding FINRA's feet to the fire when the self-regulator does such a piss poor job presenting its cases. READ

Former JP Morgan Employee Represents Himself In Paternity Leave Case

There is a famous New Yorker cartoon depicting a client and a lawyer sitting at the lawyer's desk in his office. The desk is strewn with what appears to be the client's file. The lawyer looks earnestly at his client and says, "You have a pretty good case, Mr. Pitkin. How much justice can you afford?" Perhaps more than anything, that cartoon captures the essence of lawsuits in America: cold, hard cash. Some say that casts lawyers in the unflattering role of whores. Others say that it's nothing more than the Old West tradition of a hired gun -- the faster the draw the higher the rate. I'm not going to weigh in on the debate because as one of those whores or hired guns, I've earned a wonderful living providing my services. In today's Blog, we consider the plight of a former J.P. Morgan Securities employee who opted to represent himself in a wrongful-termination case. It may well be that this Claimant just couldn't afford a lawyer's price-tag. Sometimes, these pro se cases end well. By way of spoiler alert, this one doesn't. READ

Fidelity Sues Financial Consultant Over Secrets And Unfair Competition

Fidelity Brokerage Services and a former Financial Consultant wound up in federal court and eventually resolved their lawsuit in a FINRA arbitration. The lawyers made out well. FINRA certainly earned a nice buck providing its arbitration forum. The arbitrators also earned a lovely fee.

As Blog's publisher Bill Singer, Esq. observes, Wall Street doesn't place much value on its human capital. Fidelity calls the men and women who service customers "Financial Consultants," but the brokerage firm is fairly dismissive of those employees' role. The high-production value advertising wants us to believe that we're dining at a four-star restaurant on the menu of a world-class chef. In reality, maybe it is nothing more than some minimum-wage kid heating frozen food in a microwave and overcharging us for crap. READ

Oil Industry Website Hacker Sentenced To Prison

Nary a day goes by when we don't read about someone hacking into something. Frankly, we've grown a bit blase' about such things. A recent criminal Complaint, however, provides us with a fascinating details about the detective work involved in uncovering clues and ferreting out the mastermind behind allegedly unauthorized online access. At issue is the creation of an oil and gas industry website and the sale of that site for $51 million. Then the same guy who created that first site, builds another website eerily similar to the one that he had sold, and . . . well, here's where it gets interesting: The online entrepreneur attempts to sell the second site to the same folks who bought the first one from him. What makes that fact pattern illegal, you might ask. What's wrong with staying with a formula that already worked? Okay, maybe that's going to be the defendant's defense. READ

Fixer Upper Biz Puts Stockbroker In Need Of Career Renovation

Home fixer-upper shows are all the rage on television these days, and I even heard a radio advertisement for a seminar on how to make profits -- profits they say! -- from buying distressed real estate and rehabbing the property. You just buy the shambles of a home, put a few bucks into it, paint the walls with a neutral color, swap out some bathroom and kitchen faucets and knobs, and the profits roll in but for the occasional unanticipated need to rewire the entire house, bring the plumbing up to code, redo the foundation, eradicate the termites, and hire a mold abatement specialist. Some say that investing in real estate is just like investing in stocks or bonds. Come to think of it, a settling-and-cracking foundation and the Great Recession have a lot in common. In recent FINRA regulatory settlement, we see how the whole fixer-upper craze has found its way onto Wall Street. READ