Blog by Bill Singer Esq WEEK IN REVIEW

March 9, 2019
A public customer alleged in her FINRA Arbitration Statement of Claim that J.P. Morgan and her stockbroker had engaged in a scheme to move cash from her account into some mortgage refi for her ex-husband's benefit. She sought about $500,000 in losses. If this dispute played out in a court, the public would have access to the Complaint, the Answer, all sorts of discovery and motion-practice information, transcripts, and a detailed Opinion. Instead, we get a FINRA's Arbitration Decision that discloses virtually nothing about what happened. It's said that in space, if you scream, no one can hear you -- who thought that FINRA would use that line to market mandatory customer arbitration to its member firms?
Bogucki traded foreign exchange for one of Barclays Bank's affiliates. The Hewlett-Packard Company was one of Barclays' customers, and Bogucki had advance knowledge of HP's intentions to sell 6 billion pounds sterling in market transactions. He knew approximately when HP was going to start selling, and he used that knowledge to depress the price of pounds in the market just before HP sold. He lied to HP about what he was doing, and he warned his team not to let Barclays management know. And he made a fortune for Barclays at HP's expense, and no doubt got a sizable bonus for his efforts. Seems pretty bad, doesn't it? And yet, federal District Judge Charles R Breyer didn't think it was fraud, and acquitted Bogucki of all charges. This acquittal has sent shockwaves through the financial industry.
For stockbrokers representing themselves in a pro se capacity during industry-related lawsuits, often they are stepping into the street for a gunfight but armed only with a knife. Such lopsided encounters don't tend to end well for the guy with the knife (and without the lawyer); however, every so often, truth and justice prevail without an attorney's billable hour. In a recent FINRA expungement arbitration, a lone, pro se stockbroker survives High Noon.
In today's featured FINRA intra-industry arbitration, Ameriprise Financial Services sued a former stockbroker in an effort to recover balances due on three promissory notes. When the stockbroker shows up to the proceedings without a lawyer and represents himself, well, you know, that's not exactly a formula for success. And it wasn't. The odd part of the case is found in a few errant words that the arbitrators tossed into their Decision. Maybe those words were meant to have significant meaning -- maybe not?
Among the more common questions asked of me as a Wall Street lawyer is the one that starts with something along the lines of: so, you're like a lawyer-lawyer, right? I mean what I tell you is confidential, right? So . . . just between us, like, you know, just askin' and all, but, what's the worst that could happen to me if I tell my former employer to shove the balance due on my promissory note? This is a free country, right? I mean if I don't got the bucks to repay the balance, they can't prevent me from working, right? And thus begins a basis for today's featured FINRA Arbitration, which becomes a New Jersey Court case, which becomes a FINRA Office of Hearing Officers Decision, which becomes an SEC appeal, which becomes, yet again, a FINRA Office of Hearing Officers Decision, which becomes, yet again, an SEC appeal.