Blog by Bill Singer Esq WEEK IN REVIEW

April 20, 2019

Musta Been Somethin' ( Blog)
Donald Trump has been nothing but persistent in his refrain that he didn't do anything wrong. Robert Mueller's sotto voce report concluded that Trump likely, possibly, technically didn't do anything wrong, but, well, you know, he probably should have done something better. As with all bonfires, this one dies out amid thinning wisps of smoke. All of which reminds me of that wonderful song by Lake Street Dive with its fabulous lead singer Rachael Price: You said I, I didn't do anythin' wrong; But there must have been somethin' I could've done better
The Big Eight accounting firms gobbled up smaller practices, and then became the Big Seven, then the Big Six, and now the Big Four. Today, Delloite, the largest, has over 56,000 employees and earns over $13 billion in yearly revenue; the smallest, KPMG, has over 24,000 and earns almost $6 billion. At last count, 40 Big Law firms had achieved a billion dollars in annual revenue through their aggregate of 80,000 lawyers -- all of which yields millions in compensation for Big Law's partners. Notwithstanding those impressive numbers, Aegis Frumento, Esq. warns of the dangerous degree of the legal profession's structural inequality caused by Big Law.
Some say that Wall Street's Employee Forgivable Loans (also known as a "Promissory Notes" or  "EFLs") is a charade -- according to that line of thought, these are really signing bonuses or retention bonuses masquerading as loans. Frankly, that's one hell of a masked ball but the courts generally (but not always) sustain these arrangements as loans requiring repayment. As it turns out, it proves quite the uphill battle to argue that the promissory notes you signed weren't meant to be enforced; or that the provision in the agreement you signed whereby you agreed to repay any loan balances upon termination of registration was just so much legalese. Yeah . . . I know . . . I've heard it all. It was a wink-wink-nudge-nudge transaction. It was meant to be a bonus. Good luck with that. Oh, and by the way, should your former firm pursue collection of your EFL balance, you better make sure that you timely file an Answer and that you show up at the designated dates and times for all the hearings. And make sure that your address-of-record is current. As shown in a recent FINRA EFL arbitration, an up-to-date address isn't all that easy to accomplish, and even if you think everyone knows where you are and where you aren't, that may not be enough to ensure that you get notice.
There are times when Wall Street's so-called self regulation seems like a toll road, where you drive up to the toll booth on a nice sunny day, hand the guy a bill, and wait for your change. Then the damn toll collector disappears. You're getting impatient because he owes you, but, hey, what's with that car backing up in front of you and who are all those guys with fedoras and machine guns? Uh oh, this ain't gonna end well.
In today's blog, a veteran, female registered representative was terminated by Morgan Stanley for supposedly failing to timely disclose reportable events; and, thereafter, the firm sued her to recover balances due on two promissory notes. There's only one problem with Morgan Stanley's termination and lawsuit. As it turns out, the rep had filed timely, and the purportedly disclosable events may not even required reporting. If the rep hadn't been fired, repayment of the notes would not have accelerated. Despite all of that, Morgan Stanley still asked a FINRA Panel of Arbitrators to deny the rep's request for an expungement. Which makes you wonder where the hell FINRA, the industry's supposed self-regulatory-organization, is while this rep's life and career is turned upside down.