A rookie cold caller – Michael Valeri from Lampert Capital Markets, Inc.

Mike Valeri from Lampert Capital Markets just called me.  He said we spoke a long time ago and that I said I already had too many brokers in New York.

Of course, both of these are untrue statements.  First, Mike Valeri has only been registered since October.  So his definition of a “long time ago” must be different than mine.

Second, because we never spoke, there’s no way I could have told him that I had too many brokers in New York, since I have no brokers in New York and haven’t had any brokers in New York in close to 20 years.

Then he asked me if I had an account with John Thomas Financial, which I didn’t.

He then told me that he must have the wrong guy.  At least he got that right.

Good luck with your cold-calling career, Mike.  Maybe you could get a job as a storyteller, too.

Print Friendly, PDF & Email

Make LinkedIn more useful for your practice.

I know, I know. Where is the curmudgeon? He’s taking a rest. Actually, I’m not that much of a curmudgeon, it’s just that stuff has put me in a bad mood lately.

But tonight I will be a speaker at a Palm Beach Bar Association Young Lawyers’ Section seminar on various topics. One of them will be social networking. And I intend to refer people to my blog to find this link on the ABA website to help them use LinkedIn better.

So, if you want to see the 14 tips for using LinkedIn created by the ABA, click here. This way I don’t have to incorporate all 14 tips into a slideshow and read them aloud (which is a no-no anyway).

That’s the view of one lawyer from sun-drenched Jupiter, Palm Beach County, Florida. I continue to be Marc Dobin.

Print Friendly, PDF & Email

Lloyds Commodities principals ordered to pay fines and restitution.

When we reopened Dobin Law Group in 2010 (then known as Marc S. Dobin, P.A.), we moved into an office suite setup in Jupiter. There were prior tenants in the space. One of the prior tenants was Lloyds Commodities. These were not luxurious quarters.

After we moved in, we inherited the Lloyds phone number. We would occasionally get a phone call asking how to send in account documentation. The people who called did not really seem to have much of a clue. And it didn’t make sense that they would be buying physical commodities. But it wasn’t my job to warn them. One thing always troubled me, though. I never like it when a business chooses a name that seems to have nothing to do with their business but everything to do with trying to earn credibility by being confused with another established business.

There was a Ponzi scheme in West Palm Beach, Pheonix Investments. It was accused of trading on the confusion between its name and Phoenix Mutual Funds. Eventually the Ponzi scheme unraveled and the mutual fund company sued Pheonix for unfair competition or something like that.

In this case, why Lloyds? How about subliminally convincing people that the business is associated with Lloyd’s of London? People don’t ask. And if they do, I have no idea what answer was given. But it doesn’t matter.

The Palm Beach Post reports that Lloyds and its owners (neither of whom were named Lloyd) were ordered to pay about $5 million in penalties and restitution. I doubt any of that money will ever be seen, but who knows.

Print Friendly, PDF & Email

FINRA Securities Arbitration statistics remain unchanged for 2013

I wrote last month that it was not looking good for the folks who advocate for an all-public arbitration panel.  But I knew I had to wait until the publication of the year-end figures to be sure.  And now I’m sure, at least for this year.  Here they are.  The percentages remain unchanged.  Nine “all-public” cases and five “majority public” cases were decided in December.  The results did not change the percentages.

I repeat.  This turned out to be window dressing.  Of course, there could be any number of factors that resulted in skewed results in favor or opposition to my assertion.  But the fact remains that the “win” rate for customers is statistically even regardless of the panel composition in the year 2013.  Keep in mind that, for the most part, these would be panels that were selected in 2012.

But I have said before, I do not draw huge conclusions from this.  There are too many variables to beat my chest and say “I was right” no matter how tempted I may be.  But the fact remains that the PIABA folks will now say that the system is unfair simply because it exists.  I’m reminded of the Black Knight in Monty Python and the Holy Grail.  So reminded, in fact, that I am putting it here. Make sure to click on the image to get the full clip.

black knight

When you hear or read someone say “Arbitration is still unfair, no matter what the statistics” just say in your head “I’ll bite your legs off.”

That’s the view of one lawyer in Jupiter, Palm Beach County, Florida. I’m Marc Dobin (and not the Black Knight).

Print Friendly, PDF & Email

Port St. Lucie broker pleads guilty for stealing from clients.

The Palm Beach Post reports that Paul Elvidge, a broker formerly with Seacoast Investor Services and Cape Securities, pleaded guilty on embezzlement charges in Federal Court.  He reportedly stole over $1 million dollars.

First thing I noticed when I went to Brokercheck was that there are two people named Paul Elvidge, although one is Paul Elvidge, Sr.  Assuming that Brokercheck is accurate, and there are two people (who appear to be closely related), Paul Sr. was sanctioned by the State of Florida because he failed to establish written supervisory procedures for the Seacoast.  He defaulted on an administrative complaint and the State denied his application to be a broker.

Paul (or Paul Jr I’m assuming) has a different CRD# and different allegations.  He is alleged to have wired funds from customer accounts to his personal account.  The customers were unaware of the wire transfers.  I’m thinking that the failure to have written supervisory procedures may have had something to do with his ability to accomplish this feat.  Well, I’m thinking this Paul is going to do some time at Club Fed.

I hope that there was some insurance somewhere that paid back these unwitting investors.  But remember folks, read your statements!  Open your mail!  Ask questions and don’t buy the answer, “Oh, it’s just a computer error.”  Be vigilant.

Some friendly advice from one lawyer from Jupiter, Palm Beach  County, Florida.  I’m Marc Dobin.

Print Friendly, PDF & Email

FINRA arbitrator removed from panel for salty language.

I’ve seen impatience.  I’ve seen incompetence.  I’ve seen boredom.  And, yes, I’ve seen arbitrators who have fallen asleep.  But a couple of weeks ago, in a FINRA securities arbitration, I witnessed something unlike I had ever seen.

I was supposed to be in an arbitration last week, but over a month ago the Claimants asked for a postponement of the hearing, among other things.  The issue was argued with a Response from us and a Reply to the Response.  It was fully fleshed out in the moving papers.  A telephonic conference was set for 3 weeks ago.  All the arbitrators and lawyers were on the telephone conference.  It was confirmed that everyone was on the call.  The Chairperson made his introduction and preliminary remarks.  He turned the focus to Claimants’ counsel, who started to present her argument.  Then, it happened.

The industry arbitrator, with whom I am not familiar, interrupted the lawyer.  He directly addressed the Chairperson.  He told the Chairperson that he was opposed to any adjournment.  And, he added, it was time for the Claimants to “shit or get off the pot.”  You could sense that everyone on the call was caught off-guard.  I felt like I was reliving a Janet Jackson Super Bowl performance, saying to myself “Did that just happen?”  The Chairperson took control and advised the industry panelist that the parties were going to make their presentation and then there would be deliberation.  Wrong.

By the end of the day, Claimants’ counsel had filed a motion to recuse the arbitrator.  The following day, we were asked by FINRA to respond quickly, which we did.  And we said that the arbitrator was merely saying what everyone was thinking — it’s time to try this case.  He could have chosen better language, perhaps, but everyone certainly got the message.  The Claimants claimed that he had prejudged their position.  My response to that? So what.  It’s an adjournment request.  There was a Motion, a Response and a Reply.  What more was going to be said that had not already been written? Nothing.

The arbitrator was presented with the motion and our response early in the afternoon of the day after the hearing.  He declined to recuse himself.  Within a couple of hours, the Director of FINRA Arbitration had removed the arbitrator pursuant to FINRA Rule 12407.  In order to do this, the Director must find “that the arbitrator is biased, lacks impartiality, or has a direct or indirect interest in the outcome of the arbitration.”  Apparently, coming to a conclusion based on the written submissions of competent counsel, then voicing one’s opinion using colorful language, makes one based or lacking in impartiality.  So what, then, is the purpose of the written submissions if not to sway the opinion of the arbitrators?  Are arbitrators required to ignore the arguments and not find anything persuasive, regardless of how obvious the issue is?  Frankly, the Director’s decision wreaked of political correctness but not the facts.  And those who know me, know that I don’t play the PC card.

So we have a new arbitrator and the Claimants got their postponement.  We’ll see how this plays out.

That’s the view of one lawyer in Jupiter, Palm Beach County, Florida.  I’m Marc Dobin.

Print Friendly, PDF & Email

Welcome to Anthony Aiello at Laidlaw & Company (UK) Ltd, the latest cold call cowboy.

Today’s entrant in the cold caller race is Anthony Aiello.  Anthony hails from New York, of course, and works for Laidlaw & Company.

Anthony tried to remind me of a phone call we had “last April” where he supposedly gave me a stock recommendation.  He didn’t give me any such recommendation and we had no such conversation.

Interestingly, he claims to have notes where he wrote down that we spoke.  Even more interesting is that he didn’t work for Laidlaw then, he was with another firm.  He didn’t tell me “I was with another firm, then, maybe you remember that firm” or anything of that nature.  He just flat out told me about a conversation that didn’t happen.

It boggles my mind that FINRA allows these people to have licenses.  They’re so busy worrying about the big splashy headlines that they ignore the hand-to-hand combat that takes place over the phone all over the country.  Someone is training these cold-callers that it is OK to make things up during a conversation.  How is that proper?  Or do these guys (haven’t had a woman cold-caller yet) simply decide that the mark on the other end of the phone is too busy to remember what conversations they had 9 months ago?  Incredible.

As regular readers of this blog know, Anthony is not the first cold caller and I doubt he will be the last.  Maybe he’ll learn from this encounter and decide to make money in an ethical manner.  After all, he only graduated from college in May 2012.  I have socks with more experience.

That’s the “you interrupted my lunch for this?” view of one lawyer from Jupiter, Palm Beach County, Florida.  I’m Marc Dobin.  Don’t call me.

Print Friendly, PDF & Email

PIABA shows its true colors, but is unsure what those colors are.

Remember PIABA? This is the organization that was formed about 20 years ago.  Its genesis was getting a bunch of claimants’ lawyers together to take on the brokerage firms which, at the time, were fighting limited partnership cases tooth and nail.  I have friends who belong to PIABA.  I don’t.

So FINRA released its securities arbitration statistics yesterday.  For the first 11 months of 2013, investors did imperceptibly better with a mixed panel than an all-public panel.  The difference is one percentage point so the difference is insignificant.

So what does PIABA do?  They weasel.  The new president of PIABA, Jason Doss (whom I don’t know), is quoted as saying that the system is fundamentally flawed if he and his fellow PIABA members can’t win more than half of their cases that go to hearing.  I call BS on that.  I have always maintained that the numbers are skewed because the “good” customer cases get settled while the not-so-good or “bad” cases go to hearing.  So these settled cases don’t count as wins or losses, just cases that go away.

What a load of garbage.  It is intellectually dishonest, frankly, to take anything away from these numbers other than exactly what they say — In the last 11 months, about 43% of the people who go to arbitration win their cases to some degree.  End of story.  What about all the cases that settle but only go to hearing on expungement?  Are those considered wins for the customer since it is likely that the customer got paid?  Nope.  What about the cases that settle and the arbitration is simply dismissed. Those don’t count either.

Give me a break, folks.  PIABA is trying to manipulate public opinion with a terrible premise — that claimants are somehow entitled to win at least 50% of the time.  That’s bogus and Mr. Doss and PIABA should know it.  Oh, and PIABA claims that brokerages are more inclined to settle cases with three public arbitrators.  In the last nearly 3 years, I have never had that discussion with anyone.  Oh, and PIABA has no empirical proof of this either.

I guess this is why I don’t get invited to their parties. (insert sad face here)

That’s all for today.  I’m Marc Dobin, non-PIABA securities lawyer in Jupiter, Florida.

Print Friendly, PDF & Email

The All Public FINRA Arbitration Panel Made No Difference This Year.

FINRA has released its statistics through November 2013.  Surprise!  The results are not statistically different.  You can see the table here.  You have to go all the way to the bottom.  FINRA buries this comparison there.

In November of last year I commented that the stats looked like they were coming together.  And they are.  Even worse, though, is that the mixed panel result is one percentage point higher.  While it is not statistically significant, in my opinion, it is telling.  Through November, the “win” rate for customers is 43% with an all-public panel versus 44% with a mixed panel.  Big deal.  So we went through this whole rule rewrite just to prove what?

Even more interestingly, the win rates from 2011 through 2013 with all-public panels are steadily declining while the win rates from mixed panels are increasing.  What does this mean?  It means that, for all the handwringing from devout customers’ lawyers about the “stacked deck” it appears that the deck is not so stacked.  At least not in 2013.  Where is the clarion call to ban all-public panels?  That silence you hear is deafening.

My guess is that these same people who were touting all-public panels as the cure will now claim that the arbitration process is flawed and we should do away with it altogether.  There are some in Congress (who have nothing better to worry about, like balancing the budget or funding the cure for cancer) who have started the same handwringing.  Just wait until they abolish arbitration for customers and those customers can’t find a lawyer to take their $25,000 case.  Then what?

Do I sound cynical?  I am.  There’s a few miles on my odometer and I feel like I have heard this tale of woe for too long.  Leave arbitration alone.  Go fix something that’s broken, like Congress.

That’s the New Year’s view of one lawyer from Jupiter, Palm Beach County, Florida.  I’m Marc Dobin.

Print Friendly, PDF & Email

Brokerage firm learns a lesson about stubbornness in arbitration.

A client approached us last year. He had retired from an independent-style brokerage firm and sold his book of business to another broker. He had signed a “Continuing commission” agreement with the broker and the firm. He was was supposed to get a percentage of the commissions paid by his former clients over the next 3 years. This is all kosher and approved by FINRA pursuant to IM 2420-2

We looked at the agreement and concluded he was entitled to be paid. We wrote a demand letter to the brokerage firm. They told us, in essence, to go down to the beach and pound sand up [not family-friendly expression completed here]. We had a better idea. We filed a FINRA arbitration on our client’s behalf.

A year later, the client had his result. He was awarded most of what we claimed in the original letter. The brokerage firm was told to honor the continuing commissions agreement going forward. But the kicker was that the client was awarded his entitlement to attorneys’ fees. These fees, because the amount in dispute was relatively small, were more than the compensatory award. Frankly, we would have advised the client that it was too expensive to go forward if the fee provision was not in the contract. But it was and we did.

So, in retrospect, would the brokerage firm had been better off paying the demand when it was made last year? Sure. Do they regret their decision now? Who knows. But one thing is for sure. They now see, from a dollars and cents perspective, that settlement is cheaper than trying a case. Will they learn from this? Doubtful. There is an arbitration award out there that now reinforces the validity of their continuing commission contract and how they administer it.

We were pleased to represent the client, who was a gentlemen and quite the raconteur. We only wish that the brokerage had settled when it was the right and smart thing to do.

That’s the view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

Print Friendly, PDF & Email