October 30, 2021
In a recent employment dispute, Merrill Lynch argued that although they had intended to promote an employee, they could not have promoted the employee, but that they had the right to decide not to promote him even if they couldn't; but, regardless of what the firm could not do and also had the right to not do, Merrill had a reasonable basis for not promoting him and made an effort to report on his Form U5 why they didn't promote him. And folks wonder why there's so much litigation on Wall Street.
Another day and another dispute on Wall Street between a former employer and a former employee. As TD Ameritrade saw it, scorched earth was the way to go. The firm asked for every damn form of damages you can imagine plus injunctions up the wazoo. In the end, we got the smell of napalm in the morning, but by night, the parties reached a settlement and stipulated to a FINRA Arbitration Award. All of which may explain why the FINRA broker-dealer model is a smokin' mess when it comes to employment disputes.
Indeed, the dead tend to keep secrets. Among the more disquieting silences are those involving brokerage accounts that were supposed to have Transfer on Death ("TOD") beneficiaries but, for one reason or another, those designations didn't get made, or, if they did, the paperwork wasn't executed. Thus, we are left with the often-voiced promises by a now-deceased accountholder to transfer his holdings to Jane or Joe or Jack or Jill but, oh my, there's no executed authorization in place. Which often leads to charges that the deceased made it very, very clear to her stockbroker that the TODs were to be put in place, which prompts much finger-pointing and that leads to the blame game, which is often the last step before the lawsuit.
In poker and arbitration there is the game within the game. There's the bluff. There's misdirection. There's tactical betting. There's strategic betting. There's knowing when to hold. And when to fold. All of which may not make much of a difference if you're dealt a crapola hand. In a recent FINRA arbitration, former UBS customers sought $10 million in damages based upon allegations about the firm's options program. Ante up.
FINRA censured and fined Equitable Advisors, LLC after the firm had settled a customer arbitration via an agreement in which the customer agreed to "not oppose, object to, or otherwise interfere with" any expungement motion. Although such a pre-conditioned settlement runs afoul of FINRA's rules, the regulator conceded that the offensive language was not inserted by Equitable and had inadvertently slipped by the firm's oversight. Which begs lots of questions for which there are no answers provided by FINRA.