Bill Singer Reflects on Stone v. Bear Stearns

Former Forbes columnist and veteran securities practitioner and pundit Bill Singer summarized his view of the pending dispute in Stone v. Bear Stearns, et al. as follows:

"Many commercial and residential premises are required to maintain smoke detectors as a first-line of defense; however, you pull the fire alarm after the smoke detector goes off.  Seems to me that the EDPA and [Third] Circuit failed to take into account that to some extent Marston's relatively limited disclosure and FINRA's fumbling disconnected Stone's smoke detector. To now blame him for not having pulled the fire alarm sooner seems unfair and unreasonable."

Read the full Broker and Broker post here.

Bloomberg's Cohan Dissects Customer Claims Versus Wall Street "Overlords"

William Cohan concludes that "mandatory" arbitration (and FINRA itself) should be abolished in his observations about a case on which I am a member of the appellate advocacy team, and in which a customer's rights were abused throughout the process.
Read Cohan's column here.

Son of SOES Bandit is a “Flash Boy”

Michael Lewis, market critic and celebrated author of Moneyball, Liar’s Poker, and The Big Short, offered a revealing look into some of the shadowy synapses of High-Frequency Trading (“HFT”) Sunday night on 60 Minutes in support of his newest work, Flash Boys (view interview here).  His eye-opening findings and rhetoric about the algorithm-driven fiber-fed flim-flams by HFTers using technology and light to perpetrate one of the oldest scams in the market—front-running.

I co-authored a piece for the NYSBA Securities Litigation & Arbitration website on the controversial HFT practice called, “Quote Stuffing,” a Recipe for Regulation, which you can read here.

Law School Clinics' Well-Deserved Recognition for Well-Reasoned SCOTUS Advocacy

Among my morning reading was this gem:

The Pittsburgh Post-Gazette reported in today's edition about the efforts of law students from the Univ. of Pittsburgh Law School and Pace Law School as amici advocates in the pending matter of Stone v. Bear Stearns, et al., Case No. 13-959, involving a "public" arbitrator in FINRA arbitration with numerous undisclosed conflicts of interest.  Pitt 2L Sydney Normil from Jamesburg, NJ, said, "It's the best practical experience I've had in law school."

Pace Law School Investor Rights Clinic Director, Prof. Jill I. Gross said, "It's an issue we think is in dire need of addressing.  [Mr. Stone] was supposed to get a neutral panel of arbitrators.  He did not get a neutral panel of arbitrators and he lost."

Pitt Law students and Professor Stewart pose with a brief they authored for the U.S. Supreme Court. From back to front, Kieran O'Leary, Jeremy Papp, Stuart Carney, Fangxing (James) Li, Kelly Horejs, Joseph Fladung, Sydney Normil, Joseph O'Neill, and Professor Alice Stewart. Andrew Karas not pictured.  Connor Mulvaney/Post-Gazette

Read the full Post-Gazette article here.

Fifteen Years and Roughly 40+ Arbitrations Before FINRA Removed Arbitrator Posing as a Lawyer

Not the former fake lawyer / arbitrator.

Sheeesh.

A Santa Barbara man removed from FINRA arbitrator roster claimed to be licensed in California, Florida, and New York, which was news to California, Florida, and New York.

Full InvestmentNews article here.

Florida Supremes: Consumer Arb Clause Must Be In Language Customer Speaks

Not the actual car dealer.

The Florida Supreme Court ruled yesterday in Basulto v. Hialeah Auto., LLC that use of an English-only pre-dispute arbitration clause with customers who do not speak English (N.B. all of the contract documents were English-only) does not create a contractual "meeting of the minds," the offending clause is unenforceable, and the auto dealer's attempts to compel arbitration were denied.

The detailed opinion in Basulto v. Hialeah Auto., LLC, Case No. SC09-2358 (March 20, 2014), can be accessed aqui.

Ameriprise Broker Used Customer Cash to Pay Plastic... But Wait, There's More!

Bill Singer of Broke and Broker expertly dissects the case of In the Matter of Jeffrey Scott Davis, Respondent (Letter of Acceptance, Waiver & Consent ("AWC") 2013037743101).

Jeffrey Scott Davis was formerly associated with Ameriprise, you know, Tommy Lee Jones' friends who are always there to help you with retirement, and last week he submitted his AWC, which FINRA accepted, and with that, Mr. Davis was banned for life from the business.

Mr. Davis did this voluntarily, instead of having the regulatory process against him continue. Once you read Bill Singer's analysis that decision begins to make perfect sense. It involved allegations that he went on a spree using customers' money to make electronic ACH payments of his credit card accounts.

According to FINRA, Mr. Davis had no prior regulatory events in his sixteen-year history in the securities industry.  According to Mr. Singer, what went missing from the AWC is far more troubling than what appeared.

Read the whole story at BrokeandBroker.