FINRA has had an awful lot dumped onto its plate in recent months. Since, as it turns out, its members aren’t the best at reporting little things like criminal convictions, personal bankruptcies, tax liens, etc., to the self-regulator, it’s had to order member firms to do some background checks themselves, rather than just take the word of the new guy who’s joining his 34th brokerage in eight years. Worse still, it’s had to tell those member firms to give it all of the information, which it had promised to go through with a fine toothed-comb and check against court records to minimize the number of paroled felons doling out financial advice under its august banner.
On Monday, Paradigm Capital Management became the first investment fund to pay a fine for retaliating against an employee who reported his firm’s misdeeds to the S.E.C. The hedge fund, which is based in Albany, N.Y., and manages $1.5 billion of client money, agreed to pay $2.2 million to settle the civil charges…Mr. Nordgaard was head trader at Paradigm Capital from 2009 to August 2012, when his contract was terminated. Mr. Nordgaard, who filed a lawsuit against the firm in 2012, said that shortly after he told his employer that he had reported trading violations, Paradigm Capital “embarked on a campaign of retaliation” against him. Days later, Mr. Nordgaard was removed from his desk and stripped of his trading privileges, according to the lawsuit. He was then assigned to “an isolated location to do low-level compliance work”. [Dealbook]
Having already put the mysterious, opaque platforms on notice, Mary Jo White & Co. are beginning to undress them. One’s already in the soup for taking a little too much pride in the folks it was quietly and very untransparently trading for. The rest are now having some light shone upon the disclosures they’re supposed to be making but maybe aren’t. Read more »
After a high-profile setback involving a certain outspoken NBA owner (not that one), the SEC thought it had figured out how to get a jury to see things its way. Did one not just find that a Texas septuagenarian was every bit the conniving fraudster that the SEC said he was?
As many of you know, in 2010, the SEC created a whistleblower program wherein a person who “comes forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered” can collect a nice little payout (awards range from 10-30% of the total collected). So you can’t really blamed the unnamed man or woman who submitted 196 applications1 for awards over the last 3.5 years in an attempt to win a nice li’l finder’s fee for him/herself, but the SEC can decide to make it official policy that any future cases submitted by this person shall be used for kindling, which it did last month. Read more »
The SEC would love to do something about all of those brokers doing all of those bad things and then lying about it while FINRA looks the other way. It really would. But it just doesn’t have the time, by which it means money. So it would really appreciate it if someone, say, FINRA, would step up to the plate and do its job. Read more »