Blog - Investor/Financial Advisor Legal Alert
Ex-Schwab Broker Barred for $1M Office Supply Heist Nov 19, 2014
FINRA has permanently barred a former Charles Schwab & Co. Inc. broker after he allegedly stole around $1 million in office equipment from his former firm. According to a letter of acceptance posted to FINRA’s disciplinary database, Jeffrey Grove, a financial consultant in the Melbourne, FL office, used the firm's…
No Gag Clauses in Financial Services Settlements Oct 20, 2014
In an October Regulatory Notice, FINRA, in recognizing the contribution that whistleblowers make, reiterated that it is a violation of FINRA Rule 2010 to include confidentiality provisions in settlement agreements or any other documents. These include confidentiality stipulations made during a FINRA arbitration proceeding that prohibit or restrict a customer…
Second Circuit Adopts Bright-Line Rule For Determining Customer Status For Mandatory FINRA Arbitration Sep 22, 2014
Thirty years after the McMahon decision (Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987)), which upheld mandatory arbitration of customer disputes, the Second Circuit Court of Appeals clarified under what circumstances a claim against a brokerage firm must be filed in arbitration in Citigroup Global Markets, Inc. v. Abbar, No.…
FINRA Rule Proposal for New Hire Background Checks Moves to SEC Sep 18, 2014
FINRA is pushing ahead with a rule-change that would require brokerage firms to vet new hires more thoroughly. Firms already are expected to review job applicants. The new rule makes that requirement more stringent by forcing them to conduct a search of public records. Click for Proposed Rule Change
Risks of Prosecuting and Defending a Broker Note Case Aug 20, 2014
Ex-Morgan Stanley broker loses nearly $1M but gains 100K in FINRA arbitration case.FINRA panel finds financial adviser liable for the balance of his upfront promissory note, but finds that Morgan Stanley owes the broker $100,000 for closing his branch. Click for FINRA Award Dispute ResolutionClick for Investment News ArticleAugust 20, 2014
SEC Approves FINRA Rule 2081 Regarding Prohibited Conditions Relating to Expungement of Customer Dispute Information Jul 30, 2014
The SEC has approved FINRA Rule 2081 (Prohibited Conditions Relating to Expungement of Customer Dispute Information) to prohibit member firms and associated persons from conditioning or seeking to condition settlement of a dispute with a customer on, or to otherwise compensate the customer for, the customer’s agreement to consent to,…
The Good, the Bad, and the Ugly of FINRA Investor Arbitration Jul 18, 2014
Considerations in Prosecuting and Defending a Broker and Brokerage Firm in a FINRA Customer or Industry Arbitration Click for NY Times Article: Taking a Broker to Arbitration July 18, 2014