Posted by Larry Doyle on May 22nd, 2014 11:27 AM |
Do you ever hear or read a statement put forth by a public official, industry representative, or regulatory spokesperson and think “Are you kidding me?” . . . if not something far less polite than that?
I would guess that in a world in which politicians and their spokesmen are not often called on the carpet, many people allow statements worthy of being challenged to go in one ear and out the other if they bother to listen at all.
Today I am not of a mind to be quite so dismissive given the fact that the topic at hand — Wall Street arbitration — not only touches every employee on Wall Street, but also every investor in the nation.
Let’s navigate and continue to play to win for those who care about real transparency and integrity in America. (more…)
Posted by Larry Doyle on April 25th, 2014 7:27 AM |
In a case that strikes at the core of so much that is wrong on Wall Street and the financial regulatory system (SEC and FINRA), Susan Antilla once again distinguishes herself by bringing real light to a regulatory arbitration system that much prefers to operate in darkness.
The following case might appear to be fodder for an episode of CSI but is all too real for a Long Island couple who were little more than prey for an unscrupulous broker who went largely unchecked both by his employer and the regulator charged with protecting the public from the likes of this scum.
Let’s navigate as Antilla writes Case Closed in Securities Dispute, Until New Evidence Is Uncovered:
A Long Island couple who lost $5 million at the hands of Mark C. Hotton, the former stockbroker notorious for defrauding Broadway producers, is arguing that his employer, Oppenheimer & Company, withheld critical evidence during an arbitration hearing and should be held liable. (more…)
Posted by Larry Doyle on February 18th, 2014 6:34 AM |
Bill Cohan, Susan Antilla, Gretchen Morgenson.
Although these individuals are not the only financial journalists whom I hold in high regard, they are certainly among the very few.
Who else is in their company? Bloomberg’s Jonathan Weil, who just the other day wielded a very sharp pen in addressing the arbitration process on Wall Street, or what I define as ‘the kangaroo court.’
Truth be told, the folks at FINRA who oversee Wall Street arbitration seem to be getting a little weary of being used as a punching bag and have made some tweaks to the system. Weil is not impressed. (more…)
Posted by Larry Doyle on December 17th, 2013 8:19 AM |
Two weeks ago, the folks at the Project on Government Oversight filed a friend of the court brief in an attempt to bring some meaningful transparency to Wall street’s largest self-regulation organization, FINRA.
Why is it so important that FINRA be compelled to open its doors? Too many reasons, but one of them is embraced by Senators Jack Reed (D-RI) and Chuck Grassley (R-IA) who yesterday provided further fuel to the fire for those looking for real transparency from FINRA.
Let’s navigate and review a press release that highlights just how opaque this organization is.
WASHINGTON, DC – In an effort to protect investors and the integrity of the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck program, U.S. Senators Jack Reed (D-RI) and Chuck Grassley (R-IA) today sent a bipartisan letter asking FINRA to clarify and strengthen standards for expungement of investor complaints against brokers. (more…)
Posted by Larry Doyle on October 28th, 2013 7:42 AM |
How do the executives running FINRA reconcile that mandate with the fact that problematic issues raised by Senator Ed Markey (D-MA) back in the mid-1990s continue to be outstanding today? In a recent letter sent by Markey to FINRA CEO Richard Ketchum, the Senator from Massachusetts writes,
I was alarmed to learn that arbitration awards and settlements do not show up in FINRA’s BrokerCheck database because brokers have been able to successfully expunge the information. (more…)
Posted by Larry Doyle on July 12th, 2013 7:29 AM |
When disputes on Wall Street are adjudicated through a system of arbitration, the stacked deck against which investors — and Wall Street employees as well — are forced to contest can only be properly compared to a kangaroo court.
I am very pleased to see that the kangaroos are receiving a lot more attention lately. Recall that the SEC’s own commissioner Luis Aguilar recently called for an end to mandatory arbitration. In the following 8 minute clip presented by Investment News, we witness a few industry lap dogs repeating the party line as to why arbitration should be maintained. Heath Abshure, the Arkansas securities commissioner and current President of the North American Securities Administrators Association, presents a strong counter argument. (more…)
Posted by Larry Doyle on March 13th, 2012 11:03 AM |
I will admit that having written extensively and aggressively about Wall Street’s self-regulator FINRA over the last three years, I did not think there was anything more I could see that would surprise me.
Today I am surprised, shocked, and saddened.
For those in our nation who have a semblance of decency and a desire to see due process reflected in legal hearings and financial arbitration, I believe you will be similarly dismayed.
The case to which I will refer strikes deep into the core of Wall Street arbitration. (more…)
Posted by Larry Doyle on September 29th, 2010 4:49 AM |
Those who care about truth, transparency, and integrity while navigating our financial markets and economic landscape won another round in our ongoing battle today. How so? As with any business, disputes and disagreements will always occur. How those disputes are adjudicated has always been a subject of much consternation on Wall Street and more so throughout America. Why? Many investors felt the mandated arbitration process disadvantaged investors against Wall Street firms because the arbitration panel has traditionally consisted solely of industry representatives. That standard went through a trial change. That trial change is now being proposed to be made permanent. Think Wall Street and FINRA are beginning to understand how America truly feels? Wall Street’s self-regulatory organization FINRA released the following statement today: (more…)
Posted by Larry Doyle on November 10th, 2009 8:47 AM |
Ignorance of the law is never an acceptable defense on Main Street; regrettably, the same does not seem to hold true on Wall Street. How so?
A recent auction-rate securities arbitration case involving an investor who purchased ARS from a Raymond James financial representative acknowledges the ignorance of the sales rep, but effectively absolves the firm in the process. The implications of this decision should not be underestimated. The Wall Street Journal sheds further light on this case in a recent review, GETTING PERSONAL: Investor Loses Out In Auction-Rate Case:
A complaint brought by an auction-rate securities investor offers insight into the plight of those stranded in the instruments as well as the arbitration process some investors dread.
Like many investors, Gene McCutchin, a real-estate entrepreneur, was holding auction-rate securities when the $330 billion market froze up in early 2008. He filed a complaint against his broker, Raymond James Financial Services Inc., in September 2008 asserting negligence, fraud and breach of fiduciary duty, among other things. He said the brokerage failed to warn him about the risks before his purchase, and he asked for compensation and punitive damages.
A Financial Industry Regulatory Authority arbitration panel, in an Oct. 26 resolution, didn’t award damages or order that the share sale be rescinded. It supported some of McCutchin’s assertions, finding that a Raymond James broker, Rick Woolfolk, “was poorly trained with respect to the ARS product,” and it did order the brokerage to pay forum costs.
But the panel also said that McCutchin identified himself as “a sophisticated investor.” While McCutchin wasn’t informed about the extent of risk before the transaction, it was clear that his personal adviser, Dan Chilton, understood that he was buying ARS bonds, and that the higher returns they offered came with higher risk, the panel’s resolution said.
Let’s zero in on the phrase, “wasn’t informed about the extent of the risk before the transaction.” The fact that the FINRA arbitration panel is absolving Raymond James in this transaction, despite the fact that the customer was not informed of all the risks, should send chills down the spine of every investor in our public markets. With that statement, the arbitration panel is sending a message, loud and clear: “Buyer Beware!!” You are on your own.
To mitigate the enormous risk of purchasing an investment that a sales representative may not understand, I would strongly encourage individual investors to do the following: (more…)