Blog by Bill Singer Esq WEEK IN REVIEW

November 17, 2018

A legal, regulatory, and compliance feed curated by veteran Wall Street lawyer Bill Singer

Stockbroker Victimized By Mother In Law Complaint About Stolen Funds ( Blog)
All's well that ends well, except, when, by the time it ends, you've been put through the ringer and emerge much worse for the wear and tear. In a recent FINRA arbitration, a stockbroker seems to have been put through hell by the false accusations of her former mother-in-law. The focus here is on "former," which, you know, pretty much sets the stage in terms of all your questions about "why" or "how come." Suffice it to say, the victimized stockbroker emerges from the regulatory ringer with an expungement recommendation, but I doubt that she feels the outcome off-set the stress she was put through.

GUEST BLOG: Pragmatic Federalism In a Blockchained World by Aegis Frumento Esq ( Blog)
The Securities and Exchange Commission is trying to regulate cryptocoins and coin exchanges nationally with position papers and enforcement actions, which is rather clumsy. This comes just as blockchain fever seems to have broken, being hyped less and less on earnings calls as people realize how little they understand it. Blockchain-enabled instruments and transactions are a truly new thing, and the statutes governing the SEC were never intended for them. It will be a long time before Congress passes blockchain-specific legislation, and Congress will never be able to act fast enough. Technology always evolves faster than applicable laws can be passed, and blockchain is morphing faster than most. For all those reasons, the SEC's efforts will remain imperfect and always late. But the States -- particularly New York and California -- are better positioned to enact regulations tailored to the realities of these new financial tools. Being where much of tech and finance is located, those States can act faster and more precisely than Congress or the SEC.
Okay, sure, I'll admit it: I look at the cover and judge the book. Hey, at least I'm being honest here. It's pretty much the same with a lot of FINRA Arbitration cases. I take a gander at the caption and if I know some of the parties, I pretty much know whether they're going to win or lose. Nah . . . it ain't always accurate but more so than you might think. In a recent public customer arbitration against four industry respondents, I immediately honed in on one: Legend Securities, Inc. Frankly, I didn't think that there was much point in reading the FINRA Arbitration Decision. No way that any public customer was going to lose almost any reasonable case involving Legend. Maybe I should have read the decision rather than merely judged the outcome by the caption?
In its press release,"Odeon Capital Group LLC Strengthens Equity Desk Research," the broker-dealer announced on December 7, 2016, its hire of Jahanara Nissar as an Equity Desk Analyst in Technology, Media and Telecommunications. Odeon was happy to have Nissar onboard. She had all the tools to make it on Wall Street and seemed headed in the right direction. Unfortunately, life is full of surprises. Some of which are quite nasty. 

Stockbroker Told to Provide Personal Email Account Password to Employer ( Blog)
If you work on Wall Street, you know -- or you should know -- that you're not supposed to conduct business activities via your personal email account. Sure, I know, the office email account is crap and it often crashes and then there's that whole thing about how your compliance department randomly reviews your communications and, sure, there was that time, only once mind you, but, you know, it was a mistake, you didn't really mean to attach that pornographic image of Santa Claus and that one elf to your Christmas message to your clients that you sent from your personal email account, but, hey, it was the night after the office party and you had a bit too much egg nog and, gee, no one has a sense of humor anymore, and, anyways, you didn't send the porn via your office email account, right? In any event, by way of spoiler alert, there's no pornography involved in today's column but we do have the disputed use of a personal email account and that got FINRA involved, which ended with a fine and suspension.