Blog by Bill Singer Esq WEEK IN REVIEW

March 23, 2019
In today's featured FINRA Arbitration we are presented with a case in which the parties are not public customers, they're not FINRA member firms, and, no, they're not even associated persons of FINRA member firms. How did these parties wind up before a FINRA Arbitration Panel?
Operation Varsity Blues alleges that parents bribed coaches to recruit their kids as college-level athletes even if they never played; paid proctors to correct their imperfect SAT answers; and (even easier) hired smarter kids to take the SAT for them. When it comes to this developing story, Aegis Frumento says he's not a disgruntled outsider. He calls himself a disgruntled insider. Frumento, a Harvard graduate, interviews prospective applicants for admission and finds the candidates bright and qualified, but their high school careers are impossibly over-scheduled with AP courses and extracurricular achievements, each student trying to outdo his classmates to impress some faceless college admissions committee. They do it to please their insecure parents and striving teachers, and because they've been brainwashed into thinking the prize of attending a college ranked a spot higher by US News & World Report is worth the abuse they endure. Frumento says that's the fraud that dwarfs Operation Varsity Blues.
As this historic bull market rumbles on, many investors have dabbled with a number of so-called non-traditional exchange traded products. Sometimes the investment yields a profit; other times, not so much. Wall Street isn't an insurance policy, however, it's more like a casino: Place your bets. Hands off the table. Dice comin' out!! In a recent FINRA regulatory settlement, we come across one stockbroker who solicited about 1,910 purchases and 1,663 sales of so-called non-traditional exchange traded products from only seven customers, resulting in $279 million in purchases and $275 million in sales, and generating about $890,000 in commissions. In the end, the brokerage firm, its Chief Compliance Officer, and its Chief Executive Officer wind up settling various FINRA regulatory charges.

SEC Prays for Relief in Complaint Against the Church for the Healthy Self ( Blog)
We are gathered here today to consider the life of the impressively named "Kent R.E. Whitney," who is a 37-year-old resident of Orange County, California. Whitney is a director and self-professed pastor of the equally impressively named Church for the Healthy Self a/k/a CHS Trust, which was incorporated in Texas in 2014 as a non-profit. We're going to refer to both the Church and the Trust as "CHS." As to that non-profit stuff, CHS allegedly gets "donations" via its CHS Trust investment program. Let's add into the mix, David Lee Parrish, 47, of Orange County, California, who also holds himself out as a pastor of CHS and a director of the CHS Trust. By the way, Whitney  is also the founder and Chief Executive Officer of the CHS Asset Management Inc. for-profit corporation ("CAM"). CHS and CAM have no securities registered with the Securities and Exchange Commission and, go figure, both entities share the same principal place of business and primary address. 

Merrill Lynch Wins A Round Against Former Employees in FINRA Arbitration ( Blog)
For some four decades from 1959 until his retirement in 1998, James A Billington was an associated person of Respondent Merrill Lynch and its former Western Regional Director. During his tenure at what was once called "Mother Merrill" or "The Thundering Herd," Billington got Merrill stock and stock options, which he put into his Trust. Alas, mom didn't age that well and the herd got thinned out. In January 2008, during the onslaught of the Great Recession, Bank of America acquired Merrill Lynch. Shortly after his Merrill stock was swapped out for Bank of America stock, Billington sold his holdings and took a proverbial bath. In September 2014, Billington died, but that only begins the saga of his Trust's lawsuit against his former employer.