Blog by Bill Singer Esq WEEK IN REVIEW

March 17, 2018

For those of you tired of our
dashing and effervescent publisher Bill Singer, Esq.'s
pithy musings and brilliant insights in the Blog,
The Network

now offers the
brief descriptions of legal, regulatory, and compliance matters with
direct links to the underlying full-text documents.

Merrill Lynch Employee and AllianceBernstein Work It Out In Unfair Competition Dispute ( Blog)
Everything is good until it's not. Particularly when it comes to an employee's decision to move on to a competitor. Once we add "former" to an employee's status, all hell often breaks out. At times, it all starts off with we love ya, we don't want ya to leave, watta we gotta do to get you to stay. Then it becomes good riddance to ya -- you were never a team player anyway. Then someone pours gasoline on a floor. Then someone lights and then tosses a match. And before you know it, we've set the building and everyone in it on fire. Other times, calmer heads seem to prevail and commonsense seems to squeeze its way into the midst of a lot of anger. In a recent FINRA arbitration, we got a AllianceBerstein former employee who apparently found peace and happiness at Merrill Lynch, but not so much peace and happiness as to preclude his former employer from filing a FINRA arbitration seeking seven figures in damages and an injunction. And then -- will Wall Street miracles never cease? -- but the combatants apparently sat down, tired to see it my way and your way, worked things out, and life goes on and everyone is happy, particularly the lawyers if they got paid. READ

UPDATE: Stockbroker Barred For Abusive Conduct Deemed Threat to Public and Industry ( Blog)
No one should come away from this case feeling satisfied or smug.  FINRA presents this registered rep as a hot-head, a walking time-bomb, and a danger to his colleagues and the public.  Whoever Gadelkareem is and was, the fact remains that much of his cited history was available for the asking to any number of employers and regulators.  He did not become a raging storm overnight and his anger issues never seemed to have stopped any number of FINRA member firms from hiring him -- and it's more than a bit unnerving to realize that FINRA tolerates the presence of such folks in its community and, similarly, never quite seems to take exception with a firm's hiring of such folks until all hell breaks loose. At what point does sexism cross the line and pose a threat to the public and industry? At what point does homophobia and racism drag a member firm and an industry into the gutter and becomes a regulatory issue? At what point does FINRA and its member firms stop excusing outrageous conduct when the bad actor is a big producer or in a C-Suite? It's always funny until it's not. READ

No Winners In FINRA Customer Arbitration ( Blog)
You ever watch a fight in which it's hard to tell who the winner is? In today's Blog we are asked to score a bout between a public customer and his former stockbroker.  Frankly, the customer is a loser in terms of the decision. On the other hand, it's sort of tough to find a winner on the other side of the card. I'm a loser. No . . . I'm a loser.

Disturbing FINRA Settlement Involving Elderly Client With Dementia ( Blog)
In today's Blog, publisher Bill Singer, Esq. presents us with a disturbing FINRA regulatory settlement -- disturbing in so many ways. Disturbing in that we are presented with alleged misconduct by a veteran stockbroker in a elderly client's account. Disturbing in that the alleged misconduct spans some four years. Disturbing in that the client was in his 90s with dementia. Disturbing in that the stockbroker had a disturbing history of settled customer complaints. Disturbing in that FINRA member firms seem all too willing to take on what we will euphemistically call "baggage." Disturbing in that despite clanging alarms and blazing flares, those in compliance and regulation seem deaf and blind. Disturbing in that we see similar signs and similar settlements over and over again but no one pushes the STOP button. Disturbing in that FINRA thinks it's doing its job by simply barring folks long after the damage and harm is done. Disturbing in that the Blog keeps publishing these settlements and keeps complaining about the impotent regulatory and compliance response but once the harangue dies down, nothing changes . . . and, apparently, nothing will. READ

Federal Court Sustains FINRA / SEC Over CEO Reckless Disregard of Net Cap Rule ( Blog)
Keith D. Geary was the owner, Chairman, and Chief Executive Officer of FINRA member firm Capital West Securities, which became Geary Securities, Inc. During two days in May 2009 and 13 days during a three-week stretch in January and February 2010, FINRA alleged that Geary Securities operated pursuant to subparagraph (a)(2)(i) of '34 Act Rule 15c3-1, which imposes a $250,000 minimum net capital requirement based upon the firm's regular receipt of customer checks payable to the broker-dealer. FINRA alleged that the firm failed to maintain its requisite minimum Net Capital. Geary Securities filed a BDW on February 29, 2012, and purportedly ceased doing business on April 30, 2012. On September 17, 2012, FINRA's Department of Enforcement filed a Complaint against Keith D. Geary and Norman Frager, who was the firm's Financial and Operations Principal ("FINOP") and the person responsible for preparing and filing the Financial and Operational Combined Uniform Single Reports ("FOCUS Reports"). READ