Securities Industry Commentator by Bill Singer Esq

The Securities and Exchange Commission has experienced a lapse in appropriations. Absent an appropriation, the staff of the Commission is prohibited from performing the ongoing, regular functions of government except in very limited circumstances, including "emergencies involving the safety of human life or the protection of property."

Accordingly, the Commission stays all pending administrative proceedings initiated by an order instituting proceedings that set the matter down for a hearing before either an administrative law judge or the Commission. The stay is effective immediately and shall remain operative pending further order of the Commission. 

Any party in a proceeding pending before an administrative law judge may request that the stay be lifted in its proceeding, if it believes that lifting the stay would be in accordance with the narrow classification of excepted matters discussed above, by filing a motion with the chief administrative law judge, who is authorized to act on such motions. Any party in a proceeding pending before the Commission may make such a request to the Commission. . .

The customer was an elderly lady with modest holdings, limited to securities issued by her late husband's employer. She was referred to Claimant who, after reviewing her life circumstances, recommended a rebalancing into CDs and mutual funds. The customer became upset, however, when she learned the sale of some of her shares resulted in a commission. She filed a complaint that the transaction was not authorized and that the penalties attached to early redemption of the mutual funds had not been explained to her. Claimant, a veteran of 47 years in the business, testified credibly that she had agreed to his recommendations and that the commission structure had been explained to her, along with the backend load aspects of the funds. The evidence at hand established clearly that the complaint she filed was untrue and that expungement is therefore appropriate.

. . .

These CRD entries emanated from a married couple, both of whom, contrary to Claimant's recommendation, sold their equity positions during a sharp decline in the market and then, when it bounced back, brought "unsuitability" complaints. The circumstances are sufficiently similar that they can be treated together. Both of the customers had considerable investment experience when they became customers of Claimant. Claimant spent significant time learning their economic situation and formulated similar strategies, creating for each a portfolio balanced between equities and debt.

The husband rode out the 2007/2008 downturn but became skittish at the 2011

market. The wife, who had not been Claimant's customer in 2007/2008, followed

suit. Their "unsuitability" allegations were likely triggered by the market's

comeback shortly after they sold, which is a clear case of hindsight. Claimant

testified persuasively that he took the time and effort to propose a rational

investment strategy for both of the customers. I conclude that their claims had no

serious basis and therefore should be expunged. 

According to information presented in court, Jones executed a scheme to steal the identities of personal acquaintances, car dealers and over 145 Memphis Neurology patients throughout 2011, 2012 and 2015. Jones used this identifying information to apply for loans and credit cards and open bank accounts in the individuals' names without their knowledge. A co-conspirator who was employed at Memphis Neurology removed patient information from the company's database and provided it to Jones upon his request. Jones agreed to compensate the co-conspirator for providing him with this information.

• Securities Industry Commentator
• Bill Singer