[A] few days later, Ang discussed the open position with Issuer A's Senior Vice President for Global Finance and Investor Relations, who would be the immediate supervisor of the candidate hired. Ang subsequently reached out to the recruiter to express his continued interest in the position and to solicit feedback from Issuer A as to the firm's interest in hiring Ang. Shortly thereafter, the recruiter scheduled meetings for Ang with four additional Issuer A employees, including Issuer A's Director of Executive Talent Acquisition, with whom Ang met on October 29, 2020.
By this point, the employment discussions had reached a level of seriousness, with mutual expressions of interest and Ang's candidacy clearly viable, such that he should have known that his employment discussions presented a material conflict of interest that required disclosure. On October 29, 2020, Barclays published a research report co-authored by Ang that provided analysis of Issuer A's recently announced third quarter 2020 financial results. The research report did not disclose that Ang was engaged in employment discussions with Issuer A.
[O]n November 27, 2020, Ang informed the Barclays research compliance department that he was interviewing with Issuer A but did not disclose that he had already accepted an employment offer. Ang had not previously disclosed to anyone at Barclays that he had engaged in employment discussions with Issuer A. Ang resigned from Barclays on November 30, 2020, while the firm was conducting an internal investigation concerning his employment discussions with Issuer A.
FINRA Sanctionswould have considered the conflict important to their investment decisions. Ang had a clear obligation to disclose his employment discussions with Issuer A in the research reports, yet he failed to do so. By virtue of the foregoing, Ang violated FINRA Rules 2241(c)(4)(I) and 2241(e). By virtue of those violations, he also violated FINRA Rule 2010.
FINRA Department of Enforcement, Complainant, v. Devin Lamarr Wicker, Respondent (FINRA Office of Hearing Officers Extended Hearing Panel Decision, Complaint No. 2016052104101 / March 21, 2019)http://www.finra.org/sites/default/files/fda_documents/2016052104101%20Devin%20Lamarr%20Wicker%20CRD%204228250%20Notice%20of%20Extended%20Hearing%20Panel%20Decision%20va.pdf
In pertinent part, consider this disclosure in the 2020 Wicker OHO Decision [Ed: footnotes omitted]:In the Matter of Department of Enforcement, Complainant, v. Devin Lamarr Wicker, Respondent (FINRA Office of Hearing Officers Decision, Complaint No. 2016052104101 / June 5, 2020) (the "2020 Wicker OHO Decision")https://www.finra.org/sites/default/files/fda_documents/2016052104101%20Devin%20Lamarr%20Wicker%20CRD%204228250%20Extended%20Hearing%20Panel%20Decision%20va%20%282020-1594340369623%29.pdfIn the Matter of Department of Enforcement, Complainant, v. Devin Lamarr Wicker, Respondent (FINRA National Adjudicatory Council Decision, Complaint No. 2016052104101 / December 15, 2021) (the "2021 Wicker NAC Decision")https://www.finra.org/sites/default/files/fda_documents/2016052104101%20Devin%20Lamarr%20Wicker%20CRD%204228250%20NAC%20Decision%20jlg%20%282022-1642206021995%29.pdf
c. Wicker's Argument that the Charges Should Be Dismissed Because of Alleged Misconduct by Enforcement FailsWicker argues in his post-hearing brief that all of Enforcement's arguments, pleadings, and evidence should be disregarded and the case against Wicker dismissed. He claims that FINRA failed to provide him with the impartial forum to which he is entitled, and he alleges that Enforcement has engaged in contemptuous misconduct under FINRA Rule 9280. Rule 9280 authorizes an adjudicator to prohibit a party from supporting designated claims or introducing matters into evidence as a remedy for contemptuous conduct during a proceeding.Wicker's argument arises from a unique set of circumstances. The charges against Wicker were originally heard and decided by another Hearing Panel, and after the decision was issued the Hearing Officer on that Panel took a senior position in Enforcement. The Chief Hearing Officer later learned that circumstances existed where the fairness of the former hearing officer "might reasonably be questioned," which is a basis for an adjudicator's recusal under FINRA Rule 9233.In light of the circumstances, and pursuant to FINRA Rule 9233(a), the Chief Hearing Officer vacated the original decision, ordered a new hearing with a different Hearing Panel, and directed that no weight or presumption of correctness be given to any prior decisions, orders, or rulings previously issued in the matter. In connection with the rehearing, additional steps were taken to ensure (i) that no one involved in the rehearing had discussed the case with the former Hearing Officer outside of the hearing process and Wicker's presence, (ii) that no one involved in the rehearing was involved in the employment process that led to the former Hearing Officer joining Enforcement, and (iii) that the persons in Enforcement who would conduct the rehearing would not be supervised or evaluated by the former Hearing Officer in connection with the case.The remedy in a case where an adjudicator should have disqualified him or herself for an appearance of potential impropriety is to vacate that adjudicator's decision and provide another trial free from any appearance problem. Wicker is incorrect that the circumstances here entitle him to dismissal of the charges against him.
Shortly after the November 2019 Order, a new Hearing Officer conducted several prehearing conferences with Enforcement and Wicker's attorney to discuss the proceeding. During the first conference, the Hearing Officer explained that she would conduct the proceeding "as a new case. It's a fresh start. It's a clean slate." The Hearing Officer explained that it was her understanding that the Chief Hearing Officer vacated the First Hearing Panel's decision because she learned that, after issuance of the First Hearing Panel's decision, the Former Hearing Officer was hired by Enforcement. The Hearing Officer further explained that the Chief Hearing Officer had determined that these circumstances "created a situation where the fairness of the earlier proceeding might reasonably be questioned." . . .
Wicker argues, as he did to the Hearing Panel in a post-hearing brief, that the proceeding against him should be dismissed pursuant to FINRA Rule 9280. He argues that, absent dismissal of this entire proceeding, the integrity of FINRA's adjudicatory process is at risk. Wicker bases his argument upon what he characterizes as the "blatant, ongoing conflict" resulting from Enforcement's negotiations with the Former Hearing Officer, which he asserts occurred during the proceeding before the First Hearing Panel. Based upon these allegations, Wicker claims that Enforcement had unclean hands, which prevents it from bringing a disciplinary proceeding against him. As set forth below, and based upon this record, we find that the Hearing Panel did not abuse its discretion in denying Wicker's request to dismiss the proceeding. Wicker received a fair proceeding before an impartial adjudicator where his ability to defend himself was not hindered or impaired.
At this juncture, it would be fair to ask "What's your point, Bill?"Footnote 21: Wicker's argument set forth in his post-hearing brief filed in March 2020-that the Former Hearing Officer and Enforcement were engaged in negotiations during the first proceeding and Enforcement obtained a favorable ruling in that proceeding because it "dangled the carrot" of a job to the Former Hearing Officer-undercuts his argument that he lacked sufficient information to seek discovery during the second proceeding and only learned of information sufficient to seek such discovery in January 2021 upon receiving the supplement to the record. Further, we reject Wicker's claim that the Hearing Panel failed to address Enforcement's role in hiring the Former Hearing Officer and only looked at the Former Hearing Officer's failure to recuse herself or provide notice to the parties. The Hearing Panel decided Wicker's request to dismiss the case under FINRA Rule 9280 based upon the record before it, and as set forth above, the appropriate remedy was applied here.
FINRA's Hearing Officers Are 70% Former FINRA And 30% Former SEC (BrokeAndBroker.com Blog / August 2, 2019)
Notwithstanding my ambivalence noted above, the biographies of FINRA's Hearing Officers are troubling when viewed in the aggregate. Of the 10 FINRA Hearing Officers, 7 had some FINRA employment prior to their hearing officer role. As to the remaining three previously-non-FINRA-affiliated Hearing Officers, each of them was employed by the SEC. Again, such prior roles in self- or federal-regulation do not disqualify anyone from serving as a FINRA Hearing Officer, nor does such prior employment (in and of itself) render an individual biased or conflicted. On the other hand, it is the appearance of bias or conflict that justly prompts complaints such as those raised by the anonymous Guest Blogger. To make the point, imagine if 7 of the Hearing Officers were former in-house counsel at Wells Fargo or JP Morgan, and the other 3 were former lawyers at major law firms representing financial services firms. In that latter scenario, PIABA and other public advocates would scream bloody murder -- and with justification.
FINRA Department of Enforcement, Complainant, v. Devin Lamarr Wicker, Respondent (FINRA Office of Hearing Officers Extended Hearing Panel Decision, Complaint No. 2016052104101 / March 21, 2019)
%20of%20Extended%20Hearing%20Panel%20Decision%20va.pdf"Regulator to Rehear Disciplinary Case Due to Potential Conflict / Officer who presided over case against brokerage executive was also interviewing for a job with the enforcement unit" (Wall Street Journal by Gretchen Morgenson / November 22, 2019) https://www.wsj.com/articles/regulator-to-rehear-disciplinary-case-due-to-potential-conflict-11574463613