Estranged husband sells wife's securities. FINRA arbitration ensues. BrokeAndBroker.com Analysis
In a FINRA Arbitration Statement of Claim filed in October 2008, Claimant Illa Mellul alleged that Respondent David Allan Marcus sold off every posttion in her account without her direction, consent, or acquiescence; and then transferred the proceeds to Claimant's estranged husband. Claimant Mellul further alleged that as a result of Respondent M Holdings Securities's failure to have proper procedures in place, Respondent Marcus was able to close Claimant's account based on documentation provided by Claimant's estranged husband wtthout verification by Claimant. Claimant alleged breaches of fiduciary duty and contract, failure to supervise, and negligence, and sought $1 million in damages. Illa Mellul, Claimant, versus M Holdings Securities, Inc. and David Allan Marcus, Respondents, (FINRA Arbitration #08-03976, August 12, 2010) .
Claimant acknowledged that Respondent Marcus did not commit any forgeries and did not personally liquidate her account. Accordingly, Respondent Marcus sought an order of expungement concerning his Central Registration Depository (CRD) files concerning this arbitration and the underlying allegations.
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Regulatory lawyer Bill Singer has analyzed and posted the latest crop of FINRA disciplinary casesSome three decades on Wall Street and you can only imagine all the regulatory cases that I've come across -- which is why this is all the more amazing. Quite possibly, this is the most staggering number of allegations of violations that I've ever seen. READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008011678303What happens if you sell shares of a security to public investors using a private placement memorandum that omitted a convicted felon’s association with the issuer, which is a material factREAD HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008011678302 You know that old line about asking someone up to your apartment to see your etchings? Well, did you hear the one about the broker who got barred because of his lithographs?
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#2008015279301 You think that I'm tough on the SEC or FINRA? Well, consider this slam from a recent federal appeals court:
This case involves wealthy and sophisticated customers who were under no press of time to decide whether to invest; customers who invested specifically in furtherance of a desire to speculate; and a broker who did not profit from his wrongdoing and who has been fined and suspended for his violations. There is nothing in the SEC’s decision to indicate why, in these circumstances, awards of restitution are appropriate under Principle 5. Indeed, the SEC’s decision is incomprehensible insofar as it attempts to amplify any meaningful causal connection between Siegel’s putative bad acts and the Downers’ and Landrys’ losses. And the SEC has cited no precedent, and we have found none, supporting restitution in a case of this sort. The SEC’s judgment is fatally flawed for two reasons: First, the SEC’s judgment is not supported by reasoned decisionmaking. Second, the SEC cites to no controlling precedent that includes reasoned decisionmaking supporting restitution under Principle 5 in a case of this sort. We therefore vacate the restitution order.
READ HERE at http://www.rrbdlaw.com/enforcement-actions/index.php?cid=1#C05020055Talk about things getting testy on Wall Street. Consider all these innovative approaches to not exactly taking various industry examinations in accordance with the rules. READ HERE at http://www.rrbdlaw.com/enforcement-actions/tags.php?term=Testing