October 31, 2020
In the hurry-up world of Wall Street, profits are often measured in seconds. Timing is everything. Get in early. Get out before it's too late. But in an industry so dependent upon timing, the rules about when and how an order is taken and when it is executed are not clear. While a stockbroker or a trader frets about when is the right time to buy or sell, profits may be squandered and losses accumulate. In a recent FINRA regulatory settlement, time ran out for one industry respondent.
What's the difference between a regulatory Bar and a regulatory Suspension? Many would answer that a Bar begins on a date certain but does not end on a date certain; whereas, a suspension begins on a date certain and ends on a date certain. With some suspensions, however, you become subject to a statutory disqualification, which, if you think about it, is a variation on the theme of a bar. Nonetheless, the general idea behind a Bar is that you're out of the business. Can you get back in? Sometimes, yes. Sometimes, no. It all sort of depends. Depends on what exactly? Ahhh . . . now there's the rub. Consider the petitions to the Securities and Exchange Commission by a barred individual.
Today's blog considers several ingredients that would get shaken into a volatile cocktail: a boyfriend, a girlfriend, her grandson, a night of drinking, an argument, his banging on a door, and some marijuana in his bag. Shake. Stir. And we then pour out a nasty concoction whereby the boyfriend gets charged with three crimes and winds up getting fired by Allstate Insurance. Which prompted the boyfriend to sue, and took us through one California Superior Court and two Court of Appeal hearings.
Starting with his being censured, fined, and suspended pursuant to two FINRA Office of Hearing Officers Decision in 2015, Chief Compliance Officer Thaddeus J. North's career then pursued a regulatory odyssey to FINRA's National Adjudicatory Council, to the Securities and Exchange Commission, and the federal courts. North's tale is a wake-up call for the industry CCOs.
You may have read about the "record" $920 million DOJ, SEC, CFTC settlement on September 29, 2020, for spoofing and manipulation involving JPMorgan Chase & Co., J.P. Morgan Chase & Co., JPMorgan Chase Bank, N.A. and JPMorgan Securities. Maybe that conglomerate will figure out whether to put or not to put spaces between its various Js, Ps., and Morgans? Be that as it may, "Bad Boy" or not, J.P. Morgan Securities LLC still opted to go, hammer and tong, after three former employees. Much like the firm's recent regulatory travails, this particular piece of FINRA arbitration didn't go all that well either.