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Posts Tagged ‘Wall Street arbitration’

Wall Street’s Kangaroo Court: Calling Out FINRA’s Linda Fienberg

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…)

J. Weil: Wall St. Arbitration ‘Plenty Rigged’

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…)

Wall Street’s Kangaroo Court Receiving Increased Focus

Posted by Larry Doyle on July 12th, 2013 7:29 AM |

Just as you cannot fight City Hall, many people are also well aware that you cannot really fight Wall Street.

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…)

Mensack v Morgan Stanley, FINRA

Posted by Larry Doyle on February 26th, 2013 5:43 AM |

What do you think you would do if in the process of appealing a case, you were informed that the court stenographer had “somehow” lost (deleted or destroyed, perhaps??) 8 hours of testimony? Do you think you might be a little pissed off?

Just a little?

Mind you, what if the 8 hours of “lost” testimony were not just any 8 hours. That is, they were not the first 8 hours. They were not the last 8 hours. What if they were 8 hours of selected intermittent testimony including key points when the plaintiff alleges the defendant perjured himself?

Must be a banana republic and kangaroo court for such a gross injustice to have transpired, right?  (more…)

Attention: All Investment Advisers and Investors…

Posted by Larry Doyle on May 3rd, 2012 7:29 AM |

The financial regulatory landscape is poised to change and, as far as I am concerned, not necessarily for the better.

Will you be merely a spectator or do you care to participate in the legislative process that WILL impact most of you? Are you an investment adviser? Are you an investor with funds managed by an investment adviser?

If you fall into either of those camps, I exhort you to get involved. I encourage you to become part of the process and the solution and not merely a bystander. How so? Let’s navigate.  (more…)

How Does FINRA Lose 8 Hours of Testimony? Wall Street’s “Kangaroo Court”

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…)

Wall Street Arbitration “Going Public” but FINRA Owes America A Lot More Than That

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…)

Wall Street Arbitration or ‘Puttin in the Fix’?

Posted by Larry Doyle on June 23rd, 2009 11:07 AM |

How would you like to bring a case in which the counterparty is not only defendant, but judge and jury as well? Probably not, right?

Welcome to the world of Wall Street arbitration.

Investors, when opening an account with a bank or broker, are compelled to sign an agreement stating that any dispute will be adjudicated via an arbitration process. On its surface, arbitration is not a bad process. It is utilized in many industries. That said, for arbitration to be uniformly fair the arbitrators must be disinterested parties. Does that happen on Wall Street? Come on, be serious!! The deck is stacked against investors in arbitration. Why?

Arbitrators obviously need to have a thorough knowledge of the financial industry in order to pass judgment. Beyond that, though, Wall Street arbitrators and arbitration have lots of issues and embedded conflicts.

Let’s take a harder look at the arbitration process. The Wall Street Journal provides a brief overview, Securities Arbitration Is Faulted:

Attorneys who represent investors have asked the Securities and Exchange Commission to drop a requirement that a securities-industry representative sit on arbitration panels.

Yes, that statement right there highlights the embedded conflict in the arbitration process. Let me simplify. Say, for example, an investor brings a complaint against his Morgan Stanley broker. On the arbitration board will sit a representative from Goldman Sachs. Simultaneously, right down the hall an investor brings a complaint against his Goldman Sachs broker. On the arbitration board sits a representative from Morgan Stanley.  Level playing field? Come on.

Investors who open a brokerage account generally sign away their rights to sue the broker or the firm for bad advice. They have to settle disputes through arbitration run by the Financial Industry Regulatory Authority, which is funded by the industry.

What do we learn here? The case obviously will not be arbitrated in your lawyer’s office and similarly not in the offices of the broker’s attorney. Who holds court? The Financial Industry Regulatory Authority, FINRA, which is funded by Wall Street. Conflict of interest? At least on the surface it would appear as such. For those unfamiliar with FINRA, this is the organization which has yet to issue their 2008 Annual Report and dumped $647 million in Auction Rate Securities either shortly before or as the ARS market was failing. Feeling confident yet? Me neither. (more…)

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