It turns out that scrupulousness is not an attribute that can be claimed by all members of the brokering class. Or, rather, it can be and often is claimed, albeit with a singular and spectacular disregard for the truthfulness of said claim. Read more »
The Financial Industry Regulatory Authority put out its annual list of New Year’s resolutions yesterday, and one of them is a pledge to keep an eye on the brokers on its naughty list and the people who hire them (often en masse). Read more »
Apparently FINRA is looking into whether sell-side research analysts are doing some naughty things, which is an evergreen topic, though you might almost imagine that the current round is being prompted by the return to public life of Eliot Spitzer, who gets a quote in the DealBook article. Eliot Spitzer: not a fan of research-analyst naughtiness.
It’s hard to tell if the analysts are doing naughty things but, probably, right? Basically the analysts are meeting with potential issuers before those issuers’ IPOs, which is fine. But at those meetings, which tend to be arranged by “so-called I.P.O. advisers” like Solebury, Rothschild or Lazard,1 they might be talking about the IPO and the analysts’ views of the issuers, which is not fine. They’re “supposed to discuss only broad industry trends at these meetings” and defer to their bankers for “specific views on a company, like earnings models or potential I.P.O. pricing,” because the idea is that the analyst meetings are not supposed to be used by the issuers to select underwriters. They’re just a chat! It’s like, hey, I’m in this industry, you cover this industry, let’s talk about broad industry trends! For my general education! Because while, yes, me and my IPO advisers sitting next to me are picking underwriters for our IPO, and while your bankers are pitching us “within hours” of this meeting, right now I’m entirely focused on a general chat about broad industry trends. That’s all this is. Read more »
She reapplied for her jobs (and a couple others where the regulator had openings) 574 times, sent the object of her affection LinkedIn requests, love letters, coffee mugs, and golf balls, and sent the object of her scorn a bunch of menacing messages about looking both ways before crossing, as well as unsolicited gay and straight porno mags. Read more »
A while back Oppenheimer & Co. let some people trade illegally in some penny stocks and today they got in mild trouble for it, settling with FINRA over charges of selling unregistered securities, inadequate supervision, and inadequate anti-money-laundering compliance programs. Oppenheimer agreed to pay a $1.4mm fine and hire a bunch of stop-doing-that consultants to tell them to stop doing that.
The FINRA complaint is mildly amusing; its list of “red flags indicating that there may have been sales of unregistered securities1 that should have prompted further inquiry” includes “the customer had walked into a branch office with share certificates of thinly-traded securities for deposit.” Not in 1920, I mean, in 2008: a customer “carried into the Newport Beach office and delivered into his new account share certificates for 255,000,000 and 500,000,000 shares of NBVG.” I just love that image for its old-fashioned solidity; I’ve entrusted my entire life savings to some bits floating around the internet but this guy was hauling around paper stock certificates. Worth, apparently, hundreds of millions of pennies!2 Read more »