The latest cold call cowboy – Spencer Trask & Co.

Again, someone didn’t do their homework. This time it was Thomas Charpie from Spencer Trask Ventures, which is related to Spencer Trask & Co..

He introduced himself then told me that his firm works exclusively with attorneys. I told him I wasn’t interested and hung up. I have heard of the firm before and don’t need their help.

So I decided to look at their website. No mention of working exclusively with attorneys. And Mr. Charpie? He’s been a broker for a total of less than 3 years. Sure, Tommy, I’ll take your advice. I’m sure you know more about this stuff than I do.

Leave me alone, guys.

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Things I learned at an arbitration with Wells Fargo Advisors last week.

As you might know, I handle a lot of securities arbitrations. I usually end up learning a thing or two during the course of the arbitration. I thought I’d share some things with you.

1 – Wells Fargo Advisors does not have a policy stating that commissions generated by a client only belong to the “broker of record.” This may be the practice, but the branch manager testified that there is no such policy.

2 – Wells Fargo Advisors, as a matter of course, compounds interest monthly when it calculates the amount it is claiming on promissory notes. However, the promissory notes do not provide for monthly compounding of interest. When the witness was asked why the interest was compounded monthly, he essentially said “because that’s how we do it.” Wells Fargo withdrew its monthly compounding of interest calculation and was going to submit the simple interest calculation by affidavit. Haven’t seen the affidavit yet.

3 – Wells Fargo Advisors has a prepaid management fee agreement. A Wells Fargo witness claims that it is electronically attested to. No such agreement was produced.

4 – Wells Fargo Advisors’ practice of conducting most supervision through a central office, rather than at the branch level, has actually reduced the level of supervision, in my opinion as someone with over 25 years’ of experience in the securities business, not increased it. For example, a central supervision office employee has no “feel” for the office. That employee won’t recognize patterns or put a broker’s rep number to a name and then wonder why the broker is engaging in certain transactions. Instead, it appears that the branch manager pretty much waits for the central office to tell him/her what to do. In the meantime, there are certain things that the central office doesn’t look for and the branch manager can’t see. It’s a shame, too.

I used to describe being a branch manager as requiring as much art as science. Walking around the office, the branch manager can “feel” what’s going on. The manager can tell who is working and who isn’t. But if the manager is simply waiting for a computer to tell him or her what to look for, rather than being proactive, then it may be too late. And then to remove many of these tasks and assign them to some remote office to look at, well that’s just asking for a problem.

As an example, many years ago, probably close to 30, a regional administrative manager walked into a satellite office at 2:30 or so in the afternoon. The lobby was full of clients waiting to see one of the two brokers in the office. The office looked very busy. But the office had only entered 3 or 4 order tickets by 2:30. The regional admin thought it was odd and they decided to close the office and move the the brokers to the main office, under greater supervision. The brokers refused to relocate and resigned. After they left the firm, the wheels came off of the Ponzi scheme they were participating in. The regional admin was right. A computer could not detect what the regional admin understood. By the way, that regional admin is now a branch manager with Wells Fargo. And I hope his talents aren’t being wasted by relying only on computer printouts.

Today I enter my 21st year as a resident of the Sunshine State. When I left New York, branch managers managed. They reviewed. They gave sales advice. They mentored. Now they wait for HAL (that’s a Space Odyssey reference there) to tell them what to do. In my opinion, heavily relying on computers for branch office supervision (and I love computers for many things) is a mistake. Computers don’t feel. They don’t see. They don’t hear. But that’s what good managers do. Or at least they did until someone decided that computerized supervision was the next big thing.

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

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Can cold callers read? Note to John Carris Investments: You can stop calling me, too.

So last week I wrote about my conversation with Joseph Gunnar Investments in New York. I don’t like getting cold called.

At the end of the piece, I wrote that my phone logs showed calls from John Carris Investments. Another no-name firm in New York. This time it was “Fred.”

At least “Fred” didn’t insult my intelligence by referring to a non-existent prior conversation. But I still told him I wasn’t interested. Before I got a chance to tell him not to call me again, he hung up.

Note to John Carris — Don’t call me again.

Now back to work.

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

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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, 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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