New NASD Cases Analyzed

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Sep 22, 2006 9:34 am

Wall Street’s Dirty Little Secrets:
  Uncovered and analyzed at<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


September 22, 2006

Every month Wall Street’s regulators issue disciplinary decisions that fine and suspend stockbrokers and their firms --- but many of the more interesting stories get buried among the sheer volume of cases.  Nationally-known regulatory lawyer Bill Singer analyzes the securities industry’s docket and provides insight and provocative commentary.  Here are some of the more unusual NASD items Bill uncovers at this month:



It’s been a relatively quiet year for violations involving undisclosed settlements by a broker with his or her clients --- but in September things changed.  NASD presented three cases involving just this violation.  Suspensions ran from 20 business days to one year, and fines ranged from $10,000 to about $25,000.  (Swicegood, Lim, and Kruse)




Although we have seen numerous NASD cases citing research violations, the overwhelming majority of those decisions involve fundamental analysis.  In this Citigroup case we see the rare violations involving Tech/Quant reports.  And a whopping $350,000 fine  (Citgroup)


Although not a tech report, the Kalla case presents an interesting fact pattern involving trading by a member of the household of an analyst --- and the trading was apparently contrary to that analyst’s published recommendations.  (Kalla)




Did you hear the one about the broker who found money orders were mistakenly issued by his firm in his name --- and then cashed them, and then gave them to a colleague to pay off gambling debts?  (Ray)


Then there was the guy who didn’t actually forge the client’s signature.  No --- he claimed that the customer’s fiancé signed the form with her approval and then Ennis impersonated the customer’s fiancé over the telephone to attempt to provide verification for his claim.  (Ennis) .htm is a leading securities-industry legal/regulatory website.  The content is published by Bill Singer, a veteran Wall Street regulatory lawyer who represents both the industry and the public. 

Bill Singer
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Sep 22, 2006 10:14 am

I don’t know why Mr. Shemano didn’t just retire and play golf after leaving the Bear, do you? It’s his passion in life and has been for quite a while.