I am not immune to cold calls. Note to Joseph Gunnar, stop calling me.

I’ve been getting cold calls lately. I don’t know what list I got on, but they’re a pain in the neck. First of all, it’s never a large wirehouse broker who calls. It’s always some guy with a New York accent. I have nothing against New York. I went to school there. I worked there. Some of my oldest and dearest friends are in New York. But the accent is the first tip.

The second tip is the following statement “It’s been a while since we last talked…” Stop right there. We never talked. I am not a moron. I remember who I talk to. And I know I didn’t talk to some guy like you in any recent memory. Because you would have remembered better than I. I am not pleasant to these guys. They annoy me, these cold call cowboys.

Today, I received a call from Kevin at Joseph Gunnar. (I see they have a person named Joseph there. I wonder if they have anyone named Gunnar.)

He starts with how it’s been a while since we talked. I told him, we’ve never talked. He says “Sure we did, when you were with John Thomas.” Of course, I’ve never done business with John Thomas, which has recently been in the news. So I tell him that we don’t know each other and have never spoken.

Then I ask him my favorite question – “Do you know who I am?” So this nitwit says “Sure, you’re Marc Dobin.” I then ask him if he bothered to look me up on Google to see who I am. It’s not hard to find me. I tell him to bring me up on Google and I will be happy to explain to him how many regulations he violated just during the brief conversation we had. I told him, not so politely, not to call me again. I noticed on my phone records that they have called my office before and I don’t want them bothering me any more. I told him that I would sue his firm for continuing to call me after I tell him to stop.

It’s been a few hours, but I’ll bet they’ll call again.

I noticed from my phone logs that I am getting regular calls from John Carris Investments in New York. I wonder what they could want.

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

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CFTC shuts down alleged commodities scam in South Florida.

When I reopened this practice in 2010 as a solo practitioner, we rented space in the Crexent office center in Jupiter, Florida. It is one of those office suite concepts where you give them your credit card and they provide everything, including phones and the like. It was great for setting up an office quickly.

The downside is that you sometimes have to deal with the mess a prior tenant left behind. When we first opened the office, we were getting mail for “Lloyds Commodities.” To me, one sign of a potential fraud is the use of a name that could confuse others. “Lloyds” appeared to have nothing in common with the company’s principals. On the other hand, it could confuse people into thinking that the company is somehow linked with “Lloyds of London,” the insurance outfit from England.

Amazingly, lots of people fell for the sales scheme that was alleged in CFTC Complaint. The CFTC recently obtained an injunction freezing the assets of many companies and their principals. Information on the CFTC’s investigation can be found here.

It’s frustrating to me to see this. No matter how much education is done and how much publicity is given, there are still people who are willing to listen to snake oil salesman promising better than average returns. I’ve said it before people. There is no magic bullet.

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

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Morgan Stanley Wealth Management Ordered to Pay 1 Million Dollars in FINRA Arbitration.

We had the distinct privilege of representing Greg Torretta in an arbitration against Morgan Stanley Wealth Management (formerly known as Morgan Stanley Smith Barney). Greg worked for Morgan Stanley and its predecessor companies for 26 years. He started as a trainee with EF Hutton (When EF Hutton talks, people listen) in 1984. He kept going to the same job every day. The firm changed its name any number of times. But Greg kept working.

Greg was the perfect example of a company man. He relocated his family to Texas when the firm asked him (firmly) to take over the Houston branch complex there. He relocated to New York, and lived apart from his family, to be a Regional Director for Smith Barney (as his employer was called then). He waited patiently to find out if he had a job after the Morgan Stanley – Smith Barney merger. He took the job as complex manager of the Garden City, New York complex, which was a lower prestige position than Regional Director. But he kept at it.

He was asked to coach a subordinate manager and see if he could be salvaged. He did what he was asked. But he eventually realized that this manager just wasn’t going to make it in the MSSB system. He recommended a termination, which he could have done all along. MSSB dawdled a bit. The manager sensed that Greg was going to fire him. So he took aggressive action to save his job. He and MSSB sacrificed Greg in the process. Greg felt that he wasn’t handled the same way that other employees had been treated in similar situations. And he felt that, after 26 years with the same company, he deserved a bit of consideration.

MSSB would have none of that. A swift decision was made that Greg would either resign or be fired. He resigned, having never been fired from a job before. He thought for a few months and then he hired a lawyer. Notice I didn’t say that he “found” a lawyer. He didn’t find us. I’ve known Greg for almost as long as I’ve been in Florida. I coached his younger daughter in soccer. I was honored that he came to my firm for representation.

We started to work on the case. While we were investigating, MSSB realized what Greg knew all along — the branch manager must be fired. MSSB fired the manager for the very reason that Greg wanted to fire him. But it was too late, and corporations are not well-known for saying they’re sorry.

We filed the arbitration. MSSB answered the claim. We had four and a half days of hearings last September and November. We demonstrated that Greg had big damages. These weren’t made up numbers but real facts. People at Greg’s level within MSSB are well-compensated. The hearing was hard-fought. Opposing counsel was a good lawyer. And he had quite an impressive track record. From what I could tell, he didn’t lose very often.

The arbitration award showed up in our office late Friday afternoon. The arbitration panel awarded Greg $1,000,000. That’s a lot of zeroes. But Greg deserved it–and more. But most of all, Greg felt vindicated. He felt that the panel saw what he knew to be the case, that Morgan Stanley had obligations and didn’t fulfill them. That he had been mistreated. And he saw that, despite its many critics, at least this time the system worked.

Yes, winning feels better than losing. Anyone who denies that is lying. But winning for a client who you genuinely like and respect is a reward on a different level. We were glad that we got Greg some relief. We can’t unwind history, but can tell Greg that the panel agreed with him. And that’s what arbitration is all about.

Every case is different. Every arbitration panel is different. Every client is different. I could lose a big case tomorrow. But last Friday, when I was talking to Greg, I was glad to be a lawyer and glad to be his lawyer.

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

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Facebook and Instagram update privacy policies, freeloaders foam at the mouth.

First, a disclosure. I was sucked in by the Facebook hype. I have lost money on the stock, on paper. It’s OK. I’ll live.

Now, on to today’s topic, the disclosure of a change to the privacy policies of Facebook and Instragram. PC Magazine just posted an opinion piece about this topic entitled “Facebook is Killing Instagram.” Big deal. It’s not like they’re hiding the cure for cancer somewhere on their servers.

Here’s what I’ve learned since I first took an onramp to the information superhighway. People like free stuff. Heck, I like free stuff. But people forget that free still costs money. Somewhere along the way, someone has to pay for the bits, bytes, flops and RAM. How is this done? Advertising. What attracts advertising? Users. What happens when the advertisers refuse to pay more money? The “free” service figures out new ways to generate revenue.

In Facebook’s case, did anyone step up and say “I’ll pay $25 so you won’t share my stuff”? Nope. They whined. Imagine this. If all of Facebook’s half-billion users kicked in a dollar that would be a half-billion dollars of revenue. $5? $2.5 billion in revenue. Then maybe they don’t have to sell that picture of you doing a kegstand five years ago. I can see the tagline “Don’t do a kegstand so you can get free beer. Get rid of cable.”

The same thing is happening with Google Apps and Gmail. Google figured out that there were lots of freeloaders, like me. Google has said no more freeloading on Google for Business for 10 users or less (for new people). So I am a grandfathered freeloader. Google has also taken away Exchange ActiveSync from Gmail and the free Google Apps accounts. Oh well. If I want EAS, then I will have to figure out how to come up with the $50 per user that Google wants. But I don’t need EAS. So I will remain a freeloader until Google makes it too unpleasant for me.

Speculation is that Google’s ActiveSync license was getting expensive. And that Google is mad that Microsoft is trying to make inroads in mobile phones. So it would stand to reason that Google is trying to discourage people from using Windows Phone while freeloading on Google’s Gmail system. Easy enough. Either the Gmail user pays up or moves on. Hence the migration to Outlook.com, Microsoft’s free email site (the much more sophisticated incarnation of Hotmail) Want it free? Go find it. And take your little dog, too.

Many moons ago it was said that “There’s no such thing as a free lunch.” This is still true today. To keep all the twits, tweets, postings, photo uploads and general foolishness of the Internet running, money has to be made and spent. The companies need to do it some way. The business model of giving it away and never making money has been proven to be not profitable. Duh.

So make sure that, when crying, you don’t drip on your touchscreen device. You might short it out. And that repair will cost money.

That’s the view of one lawyer from Jupiter, Florida. I’m Marc Dobin. Have a safe and Happy New Year.

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Thoughts on being a poll watcher on election day 2012

I have been a lawyer for over 25 years. I have been blessed with representing any number of clients who have a special place in my heart. I have had clients whose financial picture changed because of the results I obtained. I have had clients whose lives have changed because of what I was able to do for them. I thought that these kinds of results would be all that I would see.

Then Election Day 2012 came. Obama v. Romney. Patrick Murphy v. Allen West. I had volunteered for the 2008 and 2010 elections as a poll watcher. My job was to ensure that the election laws were complied with and to assist the poll workers in enforcing or complying with those laws. My 2008 and 2010 duties were pretty boring. In 2008, I was in a fairly large precinct in Lake Worth, Florida, and it had very few problems. In 2010, I was in my home voting precinct in Jupiter.

This year I was assigned to a precinct in Riviera Beach, Florida, a primarily African-American neighborhood. I had a feeling that this assignment was going to be much more interesting because these precincts can be targets for voter suppression or voter challenges. My experience this time was much more rewarding.

First there was Marcus (names have been changed). He was having a communication problem with the poll workers. They told him that his registered address was not in the precinct, therefore he couldn’t vote there. The communication issue came up because he did not explain himself well enough. The workers did not understand that he had moved to the precinct. The workers seemed unsure about the address change policy at the polls. (This was early in the day). In Florida, a voter who moves is permitted to change their address at the polls and vote a regular ballot.

I worked with Marcus and the poll staff to get the address changed. He voted a regular ballot.

There was Lynn. She had the same problem as Marcus, an address change. She had been waiting a very long time and did not seem to be getting an answer. She went out to the parking lot where I talked with her. But before I could do that, I had to answer to Mary (her real name), a local activist who wanted to make sure I was not trying to trick Lynn. (I would later meet Mary’s husband and grandson.) I assured her that I was not and showed her what I was doing.

When Lynn went back to the poll, she knew to ask to change her residence address. The address was changed and she voted a regular ballot.

There was Andre and Linda. They were both registered voters, but the system said they were “ineligible.” Neither one had an disqualifying history. In the parking lot, I explained to them what their rights were. They, like Lynn, waited a long time before they could vote, but they voted a provisional ballot. Their ballots would then be examined, along with the county’s records, and would be counted if found to be valid.

There was #23 (his real number, I think). He was an ex-convict who thought his civil rights were restored many years ago. He remembered that he voted about 10 years ago, but didn’t have any information with him. We encouraged him to have the workers look up his information and, sure enough, he was a registered voter. After he was done voting, he danced. He literally danced.

There was Guy. Guy seemed like a really nice guy. He was being told that he was ineligible to vote. He had a conviction. When I interviewed Guy, I learned that he was arrested before the 2008 election and voted in November. But he was then convicted and did jail time afterwards. He was out and wanted to vote. He didn’t know that his civil rights were not restored. He was disappointed that he couldn’t vote. I felt badly for him.

There was Sheryl. She was told by the Supervisor’s office that they would look into her voter registration issue and call her back if they could straighten it out. I never saw Sheryl again after she left. I hoped that the Supervisor’s office called her.

There was Demi. She had all of her ID stolen except for her Social Security card, she said at first. Without a picture ID, the voter would have had to vote a provisional ballot. I explained to the Deputy Clerk that if Demi had a picture ID with her name on it, along with an ID with her name and signature, she would be able to vote a regular ballot. Demi then produced a school photo ID that had a picture and her name. The Deputy Clerk pieced that together with her Social Security card, with signature, and was satisfied as to her ID. Demi voted a regular ballot.

Some people view voting as a chore. Everyone knows it’s important. But for this neighborhood where I spent the day, it was a joyous occasion. One where neighbors saw neighbors. Teachers saw grown-up students. Families voted together. Parents brought their kids. It was unlike my prior two experiences.

For me, it was a chance to help people exercise their civil right to vote. Several of the people would not have voted if I hadn’t intervened. Through the training I received and my legal training, I was able to recover something for several people that money literally can’t buy, their vote. I wasn’t paid. There was no contingency fee. Just the satisfaction of knowing that my presence in a neighborhood far removed from my own made a difference. I want to keep going back to this neighborhood and do it again.

And if you think for one moment that your vote doesn’t make a difference, think again. The Murphy/West race, as of this post, was separated in Palm Beach county by 11 votes. The other two counties in the race had greater differences, but 11 votes in our County is not much.

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

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Being a broker means that you can say “I am Sorry” – Dow Jones Video

I was quoted in a recent article on Dow Jones Wealth Adviser about whether or not a broker should apologize. My answer, just like one might expect from a lawyer, “It depends.”

If you’re sorry you’re late returning a call, say it. If you’re sorry the account statement has an incorrect address, say it.

On the other hand, if you’re sorry that your research department’s report was wrong, keep it to yourself. If you’re sorry that a recommendation you made declined in value, “sorry” is best left unsaid.

Here’s a video by the reporter (a short ad might run before the video):

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

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FINRA looking at broker incentives, again.

For as long as I’ve been involved in the brokerage business, brokers have had financial incentives. There are commissions, management fees, bonuses, trips to islands, one time there was even a contest that gave out nearly 100 leases on Porsche sports cars. FINRA knows this goes on.

Suzanne Barlyn reports that FINRA is looking at incentives again. Give me a break.

This really is the equivalent of the piano player at a bordello saying “you mean there’s women upstairs?” or words to that effect. FINRA knows this is going on. I remember going to an SIA (the predecessor to SIFMA) conference where the chair of the SEC said that recruiting bonuses were bad because they weren’t disclosed to customers. This was like 15 years ago!

FINRA is just getting around to looking at recruiting bonuses? I would say that 30-40% of all arbitration awards are for promissory note cases. And FINRA is just now noticing? Spare me.

I will be stunned if FINRA does anything because they won’t be able to figure out how to draw the line. Will it be when a broker gets a higher payout than grid? A forgivable loan? Expense account money? FINRA won’t be able to figure it out and the firms certainly aren’t going to help. But I doubt very seriously that FINRA is going to require a broker to disclose the terms of their employment with their new employer. I just don’t see it.

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

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The Market Crashed 25 Years Ago Today. Where Were You?

Onwallstreet Magazine has created a slideshow addressing the numbers of the 1987 crash. It’s pretty interesting. I know a broker who actually signed his FA Training Agreement on that day.

I was working at a mid-size firm in Princeton, New Jersey, when the wheels came off the market. It’s now part of the Pepper Hamilton organization. We wandered around wondering what the world was going to be like post-crash. I left that office a long time ago, but I still have friends there. (Yes, I have friends.)

I later learned that my friends in New York were working around the clock putting their finger in the dike while the flood started. I returned to Prudential Securities in 1988, just under a year after the crash. We were working out a huge backlog of unpaid debts. There was also a huge influx of customer complaints.

The volume that day – over 600 million shares – was unheard of at the time. Now that notion seems quaint. In 1987, a lot of the blame was placed on “program trading.” People were wringing their hands about computers manipulating the market. We still have computers calling the shots, causing market breaks, and people wringing their hands about computers manipulating the market.

The big issue for brokerage firms and their customers became a customer’s ability to understand the risk and desire to have market-based risk. The same issues came up in 1989, which was primarily due to the failure of the United Airlines LBO. The issue then came back in 2000, with the “tech wreck.” and again in the fall of 2008 with the failure of Lehman Brothers and the recession. Every once in a while, the market feels the need to remind us that we are not in control, we can only plan for the worst and hope for the best.

It is often said that a failure to study history will result in repeating the mistakes. In my 25+ years in this business, I have found that there are very few historians.

That’s a 25 year view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

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CRD, U-4 and U-5 Expungements – Can they be done in court?

Traditional wisdom held that the only way to get an expungement of a customer complaint was from a FINRA arbitrator. Since time immemorial, brokers have sought expungements from arbitrators. We have handled a number of these types of expungements. Frankly, we told brokers with old disclosure items (possibly from firms that were no longer in business) that there was nothing that could be done.

We might have been wrong. A recent case in California has held that FINRA can be properly taken before a court and ordered to remove CRD items. This is a sea change in the way things work. According to the opinion, a court always has equitable jurisdiction and the power to order changes to a CRD record.

This case was an appeal from a trial court ruling that only the FINRA Rule 2080(a) standards could apply and that the court did not have the power to apply them. The California appellate court reversed the trial court and held that the trial court has the equitable authority to expunge matters from a CRD record. This upends decades of common practice.

So, what’s in store. It certainly makes sense to seek expungement of “old” CRD disclosure items through a court and see what the court does. I’m thinking that this is going to create a tidal wave of expungement matters in state court proceedings, at least until FINRA changes the rules.

You see, FINRA makes the rules. FINRA tells a broker what they can and can’t do. FINRA may try to short-circuit this process by suggesting a rule that prohibits a broker from suing FINRA in any court for the purpose of getting an expungement. Whether they will be able to get such a rule passed is another issue.

In the meantime, the expungement window may be open.

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

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FINRA allows for special procedures for big cases.

FINRA announced this week the establishment of a pilot program for cases involving $10 million dollars or more. If your claim is $9.5 million, you’re not out of luck. The “pilot program” is available to any case, but they are targeting $10 Million dollar cases and above.

Basically, the new procedures will give the parties (inmates) the ability to make their own rules (keys to the asylum). FINRA is making a large assumption — that lawyers on opposite sides can mutually agree on anything other than the other lawyer is a nitwit. If lawyers are so agreeable, why did FINRA have to amend its arbitrator selection procedures to make sure that at least two arbitrators remained on the list after the parties exercised their strikes? Because most lawyers in “litigation mode” are disagreeable and uncooperative.

I know I’ve mentioned this before, but there was a time when an arbitration over $250,000 warranted five arbitrators. It was like being in front of an appellate bench (although most in Florida are 3 judges). Now FINRA is allowing the parties to change almost any rule.

And FINRA will allow all those discovery vehicles that courtroom-oriented lawyers love so much — interrogatories, admissions and depositions. I can hear the slobber drooling off of the faces onto the desks of hourly lawyers all across the country. Now lawyers can’t be sanctioned for outrageous discovery conduct (because arbitrators don’t have that authority), so they can act like spoiled children in a sandbox with impunity. Cynic? Me? No.

The good news – parties can only enter into the pilot program upon consent of all parties. The bad news – once there is agreement, and it looks like it was a bad idea, a party can’t back out. All or nothing folks.

So who will sign up for this? My guess is it will be large institutional claimants and respondents who are represented by large institutional law firms. Let’s face it, most of those firms aren’t really comfortable in arbitration anyway. Now they can assign the squadron of young, under-utilized, lawyers to all the menial tasks that they were missing out on when a case was in arbitration.

Basically, it appears that the only the thing that may end up missing from this is a judge and jury. It will be interesting to see how this program plays out.

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

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