There’s hardly a salesperson out there who hasn’t pretended to be someone else. You know what I mean --- your secretary wouldn’t let the cold caller through to you --- so the salesperson phoned back with a disguised voice, asked for you by first name, and said it was a personal call (which it wasn’t) from an old friend (who he/she wasn’t). You weren't happy with the deception --- but, nonetheless --- sometimes --- the caller's ingenuity paid off and got them your order. The art of getting by the so-called "gatekeepers" (the receptionists, secretaries, and assistants who run interference between you and the outside world) is a valued skill among those whose job it is to get information and open accounts. However, the art form isn't what it once was. 

In recent months the National Association of Securities Dealers (NASD) has begun to crack down on certain misrepresentations by Wall Street. In Jonathan Matthew Aschoff (CAF030003/AWC[i] March 2003), Aschoff wanted to issue a research report about a public company for which his member firm was an issuer. Using an assumed name and pretending to be a physician, he spoke with members of the medical profession in an effort to obtain confidential information about the effect of a drug under development by the company. After being confronted about his deception, Aschoff decided against using the information in a report. No harm, no foul? Well, not exactly, NASD fined him $10,000, and suspended him for two weeks in all capacities.  

Similarly, in Stephen Emerson Davis (C07030010/AWC April 2003), the NASD found that a stockbroker induced customers to do business with him through the use of misrepresentations that his clients included celebrities. For reasons not explained, Davis failed to respond to an NASD request to provide sworn testimony. Consequently, he was barred from the industry (which in light of Aschoff that ultimate sanction probably reflected his refusal to give testimony rather than the misrepresentation of his clients). And there are other recent cases in which stockbrokers were disciplined for varying acts of impersonation or pretense. The moral of the stories is fairly clear: Don’t pretend to be someone other than who you are --- no exceptions. Similarly, conduct that many on Wall Street once viewed as harmless (if not commendable) high jinx is no longer a laughing matter. However, if it’s a violation to pretend to be someone else when you’re engaged in cold calling, why don’t the regulators also slam the major firms who use television advertisements to attract clients?   

I am a huge fan of the television series Law & Order. For ten years I loved watching actor Steven Hill in his role as the crusty District Attorney Adam Schiff. Now he’s off the show after a decade. And what’s he doing? Well, he appears to be a pitchman for TD Waterhouse. Do the regulators have a problem with a major broker-dealer using an actor to land new accounts? Frankly, who is Steven Hill anyway? His real name is Solomon Krakovsky --- will the NASD require him to make that disclosure? He’s not really a former District Attorney --- he’s not even a lawyer --- why doesn’t the NASD require the ad to carry that line about “I played a lawyer on television but I’m not really one?” And what’s the purpose of having him act as a spokesperson for TD Waterhouse? Isn't there some expectation by the advertiser that you will somehow "confuse" Steven Hill's role as a District Attorney with his efforts as a pitchman for the broker dealer --- that somehow we trust this man of integrity (when, in fact, we don't know anything about him and may unintentionally ascribe the aspects of his character to the actor himself). 

Ultimately, I’m not sure we wind up at a comfortable place. The NASD says that Wall Street professionals shouldn't pretend to be someone else --- you shouldn’t even pretend that your client list includes celebrities. However, notwithstanding its newly found sense of moral outrage, the NASD still thinks its okay for a broker-dealer to use an actor’s celebrity in a marketing effort to attract new customers. Frankly, if you really think about it, there's virtually no consistency in the regulator's position. The only difference I discern is that, on the one hand, individuals are engaging in a form of prohibited deception, whereas, on the other hand, companies are engaging in a form of permitted deception. If you really, really, really think there's a significant difference in pretending to be a successful salesperson (or a doctor) and hiring a famous actor to pitch a major broker-dealer --- well, I guess we just disagree. Nonetheless, I think it's time we all started to reexamine the true nature of most of the advertising we're subjected to. Remember F. Scott Fitzgerald's provocative quote: Advertising is a racket, like the movies and the brokerage business.

[i] NOTE: Offers of Settlement (OS) and Letters of Acceptance, Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions and to the entry of findings. 

SINGER’S DISCORDANT NOTES
  Copyright 2003 by Bill Singer