Blog by Bill Singer Esq WEEK IN REVIEW

June 20, 2020
Guest blogger Aegis Frumento, Esq. spent a good chunk of his college days playing poker, and he spent equally good chunks of his days since college deeply enmeshed in the financial markets. Frumento has known gamblers and he's known traders, and he says that he honestly finds it hard to tell them apart. As Frumento sees it, gamblers and traders do exactly the same thing: they bet money on a future they can only guess at. Maybe the only difference between gamblers and investors is how they think about themselves.
Four investors share the same registered representative. Except only three of them executed a New Account Form with the rep's brokerage firm. Except all four investors want to sue the brokerage firm over insurance and annuities sales that didn't occur at that firm. All of which begins with the investors filing a Statement of Claim with FINRA Arbitration. All of which then moves on to federal court.
On June 16, 2020, Marilyn Booker filed a Complaint in the United States District Court for the Eastern District of New York charging Morgan Stanley & Co., LLC, James Gorman, and Barry Krouk with ten causes of action including discrimination; retaliation; aiding and abetting unlawful discrimination and retaliation; and violations of equal pay laws. Marilyn Booker,  individually, and on behalf of similarly situated Black female employees, Plaintiff, v. Morgan Stanley & Co., LLC, James Gorman, in his individual and professional capacities, and BARRY KROUK, in his individual and professional capacities, Defendants (Complaint, EDNY, 20-CV-02662)  Plaintiff Booker's allegations are not revelations or disclosures. They are the stuff of Wall Street's dirty little secrets. The industry knows all too well how it has failed to keep pace. Worse, Wall Street's regulatory community is more an enabler than the necessary voice of conscience.
There are circumstances by which an elderly client may indeed form a genuine, close relationship with a financial professional. Maybe the elderly client has known the investment adviser for 40 years. Maybe the client goes to the same church as the stockbroker. Maybe they've lived next door for 30 years. Maybe. Maybe. Maybe. And depending upon all the maybes, perhaps a lonely client decides to name the financial professional as a beneficiary in her Will or in a life insurance policy. On the other hand, notwithstanding all those maybes, perhaps there's something wrong and predatory going on with the beneficiary thing. Then again, 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? Today's featured FINRA Arbitration 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. And finally, as if there is any meaning to "finally" in relation to this matter, we wind up in the United States Court of Appeals for the Third Circuit.