Blog by Bill Singer Esq WEEK IN REVIEW

November 20, 2021
Today's reported FINRA intra-industry arbitration is somewhat sad in nature. We are presented with the plight of a nearly four-decade industry veteran, who seems to have run afoul of a somewhat ticky-tacky bit of alleged misconduct. Frankly, his troubles may have been prompted by something as relatively minor as a failure to disclose in writing what he believed was already known by a compliance officer. Of course, Wall Street's rules are nothing but ticky-tacky at times, and the failure to dot an "i" or cross a "t" is the grist on which the industry's compliance and regulatory mills turn.
Here we are, 2021, and we're going to discuss a FINRA arbitration filed in 2015. We got an ex-husband, who was a stockbroker. We got his ex-wife, who filed the lawsuit. Comes 2017, and that one FINRA arbitration gets bifurcated into two separate matters. Then we got the casting of aspersions. Oh my. Then the claims in the first arbitration are dismissed as having being filed too late. In the second arbitration, the ex-wife wins by default, or so it seemed. On appeal to the courts, the judges weren't all that pleased with the lack of effective service upon the ex-husband.
Yet another bit of dubious quality control arises with yet another FINRA published document. In today's iteration, we have an alleged customer complaint from someone who wasn't actually a customer when a questioned loan was extended to the financial advisor, who wasn't the non-customer's advisor at the time that the loan in question arose. And as if all of that tortured was and was not was or wasn't enough, we have a three-arbitrator Panel declining to issue a so-called Explained Decision, which turns out to be a petard on which the arbitrators themselves get hoisted. Although the Panel of three arbitrators purportedly heard the case, oddly, inexplicably, one, and only one arbitrator, made mandatory findings, which not only seems in contravention of FINRA's Code of Arbitration Procedure but, how ironic, isn't explained in the Award.
There was a time, not many years ago, when crowdfunding was all the rage and the JOBS Act was supposed to democratize Wall Street. Desperate or naïve entrepreneurs looking to raise modest amounts of capital were attracted by the promise that their ventures would be posted on a crowdfunding website. Except, as industry veterans knew, the investors with the real cash don't waste time on crowdfunding websites. As such, after the crowdfunding sites collected their fees, more often than not, the listings sat, barely getting nibbles, wasting away. Worse, many of the offers for funding proved to be scams and frauds. Some folks raised money and launched their business -- that's great. If the laws had been better drafted, if the sector had been better policed, then we might have realized the vision. In the end it was just another one of those things that fizzled out without much notice or fanfare. And so we move on to the next flash in the pan. NFTs anyone?