January 29, 2022
In a recent FINRA regulatory settlement, a Barclays research analyst got a job offer from an issuer he was covering. FINRA makes the case that the job offer posed a conflict and should have been disclosed to the employer. Fair enough -- I agree; however, when considering FINRA's charges against the analyst, I was reminded of a similar scenario involving a FINRA hearing officer. As such, we have an interesting juxtaposition of FINRA regulating the industry and FINRA managing its own house. When it came to the non-disclosed conflict in the regulatory case, FINRA was out for blood and extracted a fine, suspension, and requalification. When it came to the in-house non-disclosed conflict, FINRA seemingly replaced a divot, took a mulligan, and hey, let's pretend it's just a friendly game of golf -- go ahead, Enforcement, take another swing at the ball.
It's another day and, not surprisingly, another erstwhile wirehouse brokerage firm asks a court for a temporary restraining order ("TRO") against one of its former employees. In today's iteration, we got J.P. Morgan Securities ("JPMS") alleging that Timothy Logsdon needs to be restrained from disclosing confidential information and soliciting the firm's clients.
It is always disconcerting when elderly customers change their wills in order to leave eye-opening bequests to their stockbrokers or financial advisors. There are many decent men and women on Wall Street, and they often service their elderly customers with affection and unimpeachable rectitude. On the other hand, there are many predators on the Street. In a recent FINRA regulatory settlement, we seem to have a swirl of considerations involving a stockbroker and an elderly widow. Frankly, it's next to impossible to reconcile FINRA's allegations with FINRA's sanctions, which raises many questions.