Blog by Bill Singer Esq WEEK IN REVIEW

June 11, 2022
He's Back!!! Guest Blogger Aegis Frumento Esq has returned with a bang with his thoughts about the SEC's case against StraightPath. As the SEC saw it, the Defendants raised at least $410 million from more than 2,200 investors from November 2017 through February 2022. The Defendant's allegedly used an unregistered broker-dealer and commingled investor funds, paid themselves over $75 million, and paid their sales agents nearly $48 million from illegal, undisclosed markups on the pre-IPO shares. Oh, and another thing, purportedly two of the three founders ran the funds despite being barred from the brokerage industry.  All of which is grist for Aegis' legal-mill -- and let's not forget that wonderful text about an "a***hole regulator." So . . . welcome back Aegis.
Among the dirty secrets on Wall Street is so-called CE (continuing education) -- or at least the short cuts that some folks take when it comes to satisfying their need to take various courses, training, and tests. Some of the short cuts involve getting someone else to sign in and sit through your training.  Some of the short cuts involve getting someone to take your tests for you.  Some of the short cuts involve cheating. Frankly, it's not a unique problem on Wall Street because wherever an industry or profession requires CE, there are those who never quite seem to have the time to do what's required. Among the more troubling aspects of getting around CE is when a male manager relies upon a female subordinate to, hey, well, you know, not that anyone actually needs to know, but, ummm, it would really help me out if, you know, well, you know, right? Read about a recent FINRA settlement involving a number of CE short cuts that, in the end, short circuited one associated person's career.
Heslin Gallagher hoped to embark upon a Wall Street career. About the only obstacle in her way was the Series 7 exam, which she studied for and took . . . and took . . . and took.  What Heslin Gallagher was not going to take was what she thought was FINRA's manner of administering the exam that she failed three times. Heslin Gallagher was angry and she went about putting her anger into action.
I am not a fan of Wall Street Non-Compete/Non-Solicit agreements, which tend to be forced upon employees and are rarely, if ever, the byproduct of free and fair negotiation. All of which underscores that Wall Street's employment contracts are cynical take-it-or-leave-it propositions whereby the employer takes it all when the financial advisor leaves. Infuriatingly, the contribution of the men and women who cold call, open the new accounts, and service the customers is valued at next to nothing upon the cessation of the employment relationship.