Blog by Bill Singer Esq WEEK IN REVIEW

August 11, 2018

Mean Spirited FINRA Must Respect Membership Median ( Blog) am not credited with having brow beat NASD and then FINRA into revising the regulator's published industry statistics, I will, nonetheless, take my own personal victory lap with the satisfaction of believing that my my unceasing, years' long, harangue prompted the disclosure of data that I proposed be calculated in my above Comment. As I worked my way through what comes off largely as a FINRA community in decline over the years, I came upon a nugget on Page 4 of the FINRA 2018 Snapshot, which, at long last, proves my suspicions and confirms my assertion. Under a page heading "Average and Median Number of FINRA-Registered Representatives per Firm," we learn that for the last calculated year of 2017 that the "Average" number of registered reps per member firm was 171 but the "Median" number was only 11.

Where There's A Will, FINRA Says No Way! ( Blog)
Where there's a will, there's a way. That's a nice saying. On the other hand, where there's a Will, you will likely have some folks saying "no way" when they learn that they've been cut out as a beneficiary or some questionable character has been cut in. Nothing like death, families, and cash to make a lot of work for lawyers. In today's featured FINRA regulatory settlement, we got an elderly client and a stockbroker who became a beneficiary of the client's estate. Wall Street's got rules and regulations about that type of a relationship. Wall Street's got in-house policies about that stuff too. The question is whether Wall Street has the "will" to do anything effective when it comes to dealing with circumstances where elderly clients designate their stockbroker as a beneficiary.

The Greek Yogurt Justice Of Strained FINRA Mercy ( Blog)
When the Blog's publisher, Bill Singer, read today's featured FINRA regulatory settlement, he wasn't a happy camper. The underlying facts didn't seem to warrant FINRA's imposition of a fine and suspension -- particularly since the respondent was essentially an industry rookie. And then Bill re-read FINRA's AWC. And then he did some research. And then he followed down a few leads. And then Bill did a 180 degree turn, which isn't an easy spin for him because he has two artificial hips. Regardless of the degree of difficulty, Bill did a complete reversal of direction and came around to accept FINRA's sanctions. After Bill was done changing course and agreeing with FINRA, he couldn't stop thinking about greek yogurt. On top of that, Bill couldn't stop humming Marvin Gaye's catchy tune "Mercy Mercy Me (the Ecology);" and being that Bill's in a generous mood today, he embedded into today's blog a video of a live performance of the tune by Marvin Gaye.
News broke last week that the feds decided to stop torturing Jesse Litvak.  Jesse, you may recall, was a mortgage-backed securities sales-trader charged with criminal securities fraud.  Jesse, in selling to an institutional customer, told the customer that he was flipping the bond to it after just having bought it himself at the customer's price.  Instead, Jesse had it in inventory at a much lower cost.  Jesse was twice tried, twice convicted, and twice freed on appeal.  The government announced it won't try him a third time.  Jesse persisted, won, and I say, good for him.
In today's Blog we consider the ramifications of an arbitrator who made disclosures that weren't all provided to the parties in a timely manner. At our most charitable, lets just say that a page went missing and not everything that should have been disclosed to all the parties made it through the disclosure pipeline in one piece. At a point in time after the AAA arbitrator rendered her initial decision but before she published her final decision, the losing party learned about the failure of the arbitration forum to provide all of the pages that would have constituted the full disclosure packet -- and further learned that the arbitrator was involved with other ongoing arbitrations involving the law firm that was defending the respondent (who turned out to win the case). When the losing party challenged the arbitrator's alleged undisclosed conflict in that period before the decision was finalized, the arbitrator rejected the challenge and issued the decision.