An interesting cold call from someone claiming to be Bob Mullic from Murphy Financial Group

So the phone rang up “Unkown” on the Caller ID. I answered. It was a higher-pitched male voice who identified himself as “Bob Mullic.” He reminded me that we spoke before and I told him to call me back with some ideas. Since I am not senile, I knew he was lying. While we were talking, suddenly “Bob” lowered his voice an octave and had a different accent. I thought “well this is different.”

We continued the conversation and new Bob told me that Murphy Financial Group has 500 offices. Even more interesting. I tried to look him up on Brokercheck and couldn’t find him. I asked him why his phone number wasn’t properly displayed on my Caller ID. He said he always calls “private” and there’s nothing wrong with that. I told him that FINRA would beg to differ.

I tried to ask him his address and callback number but the line went dead.

So, as a public service, if you get a call from one of two men named “Bob Mullic”, ask them to call me so I can have their address and phone number. I’m sure a regulator would like to chat with them.

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We lost another good person who happened to be a lawyer – Bill Nortman

I couldn’t bring myself to send another email blast with bad news. But I could not let Bill’s passing go by without noting it.

I didn’t know Bill until I came to Florida in 1993. I always liked dealing with him. He clearly knew a lot about the securities business and had the respect of his peers. I even hired his paralegal (who had a very long commute to the Fort Lauderdale office) and he wished us both well.

But that wasn’t the part that I liked most. We had occasion to meet Bill and his wife at several FSDA functions. First, it was clear he was a genuinely nice guy. We had similar taste in cars (except he seemed to be able to afford his). And he was clearly devoted to his family. We met his kids and I remember (I think) seeing pictures or hearing of at least one grandchild.

That, to me, was as important as his legal skills. Lots of people are good lawyers. It is the true testament to a person’s character when they don’t let their career ruin their family relationships. It was obvious, at least to me anyway, that Bill pulled it off.

But Bill, of course, had a professional family, too. Those with whom he worked closely and those with whom he had developed personal relationships. All of those people will miss Bill.

I don’t have much more to say. I hope I don’t have to write anything else like this in 2016.

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Apparently, a cold caller might read my blog “-” Revised

A couple of years ago, “Jerry” or “Gerry” from a brokerage firm in New York called me.  You can read about it here.  I pointed out in the post that the caller ID had a bogus number and that the bogus number was a violation of FINRA rules.

So “Jerry” or “Gerry” just called me again.  He told me he was from the same firm as before.  This time the Caller ID said it was anonymous.  First he called me Mr. Dublin, then I corrected his pronunciation of my name.  Then I asked him for his last name.  He gave me a phony name.  I questioned him about his name and he told me that was the son of the firm’s founder.  I have come to believe that this was a lie as well.  I realized that this was the same guy, or someone who sounded a lot like the guy from two+ years ago.

Gerry (I’m using the G because I think that is how it might be spelled) told me that he called me a couple months ago and told me to follow Apple and that it went from some low price (I forgot the price) to 120 (that part I remembered he said).  At least he got something right.  Apple did hit 120 some time in December 2015.

I asked Gerry if he knew his Caller ID said “Anonymous”.  He sounded surprised.  He said he knew that rule 3230 requires the caller ID to be accurate.  Funny, that is what my post in November 2013 says.  Maybe I have a fan?

I then told Gerry that he was lying to me.  We didn’t speak at any time, let alone a few months ago, about Apple.  He then said I spoke with one of his associates.  I reminded him that he said that “we” spoke.  He said that’s not what he said.  Instead, he insisted that I must have something in my ears!  At that point I hung up.  But I was still curious.

So I looked up the firm’s broker roster in New York.  There is only one person who might be called “Gerry” and that is his middle name.  I won’t use his name in case that is not the person who called me.  But there is no one named Gerry or some derivative listed on the New York roster and that is the only office listed on their website.  Additionally, there are no significant owners listed on the Brokercheck with the last name he gave me.  So I am pretty sure that Gerry was not being truthful with me.

A cold-caller making things up?  I know that we are all shocked.

Gerry – please stop calling me.  You’re annoying and you don’t know who you’re dealing with when you call.

Postscript – After I posted this page, I sent a link to the Compliance Officer of the firm.  I was pretty mad.  I received a call today from the President of the firm.  He apologized.  He told me that “Gerry” was no longer with the firm and hadn’t been for several months.  He told me that “Gerry” was fired by the firm.  He told me that two years ago he personally placed my name on their do-not-call list.  I believe him.  I give him credit for calling me.  He assured me that they do not make outbound calls using an anonymous caller ID.  So I modified this post to remove any reference to the firm because I think that “Gerry” might not have been calling me from the firm.

But I do think he read my blog post.

That’s the view of one lawyer from Jupiter, Florida.  I’m Marc Dobin and you didn’t call me to tell me to buy Apple, whoever you are.

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Credit Suisse's going-away present to the brokerage industry.

So I’ve been in the securities business for over 30 years now.  For as long as I can remember, disputes between brokers and their firms went to NASD, then FINRA, arbitration.  The U-4 says it.  The FINRA Manual says it.  But Credit Suisse has a different view and, in a bizarro ruling, the Second Circuit agreed.  If you want to read the opinion, here it is..

I’m going to try to explain what happened in simple terms.  The employees had an internal beef with Credit Suisse.  The firm has an internal dispute resolution program that is informal, then mediated, then formal.  The employees went through the first two steps not to their satisfaction so, not surprisingly, they took their marbles and client list and left for Merrill Lynch.  Both firms are members of the Protocol for Broker Recruiting.

Credit Suisse then filed an arbitration against the brokers with JAMS, a mediation and arbitration service, regarding their alleged improper solicitation after leaving the firm’s employ.  Eventually, the brokers and Merrill Lynch filed a FINRA arbitration alleging that Credit Suisse violated the Protocol.  Credit Suisse said “oh no, we have to go to JAMS” and went to court to stop the FINRA arbitration, at least with the brokers.

The brokers told the court that they agreed to arbitrate in FINRA under the U-4 and FINRA Constitution and Rules.  Credit Suisse argued, incredibly, that Rule 13200 only requires arbitration, not an arbitration at FINRA.  Huh?  Worse yet, that argument prevailed, both at the trial level and the Second Circuit.  This makes my head hurt.

Did I forget to mention, Credit Suisse is pulling out of the US retail business?  So this will be the firm’s legacy.

The result left me wondering about FINRA’s actions against Merrill Lynch for making retention loans from a non-FINRA entity.  In that situation, Merrill paid a $1,000,000 fine.  I’m trying to reconcile these two situations and it makes my head hurt – again.

I’m thinking, just like the manner in which FINRA keeps sticking its finger in the expungement dike, that FINRA will be making pronouncements about how arbitration means FINRA arbitration.  If not, then it will confirm some of the suspicions held about the agency’s bias.

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

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On Wall Street agrees with me.

So I haven’t written in a while.  I apologize to the three people who actually read my blog.  But this struck me.  On Wall Street magazine recently posted an article discussing the wisdom of firing clients.  I wholeheartedly agree.

I’ve tried so many cases and handled so many more.  Like a disintegrating marriage, there are frequently signs that a broker’s relationship with a client is deteriorating.  Phone calls don’t get returned.  The client doesn’t respond in the usual manner to seminar invitations.  The client becomes more demanding, including demands for significant commission discounts because of account performance.  These are all signs.

It is not unusual to hear from a broker, during the course of an arbitration proceeding, “I should have fired the client, but I did not want to make him/her angry.”  Well, by that time it’s too late.  And it doesn’t matter.  Once a client has decided that the broker is the enemy, no amount of being nice is going to repair the relationship.  As Queen Else sings in Frozen, let it go.  A broker will lose more money and time trying to retain an unhappy client rather than simply showing the client the door, politely of course.

That’s the view of one lawyer from sunny and unseasonably warm Jupiter, Florida.  I’m Marc Dobin.

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I am ambivalent about Avvo and here is why.

As the son of a lawyer, I kind of knew about Martindale-Hubbell ratings.  As a new lawyer, I knew that I wanted that Av Martindale-Hubbell rating.  It meant that my peers thought highly of my work and ethics.  When I first received the rating, I told my dad and I was quite proud.  When I had a partner, the law firm had an Av rating.  Then the internet came along.

The internet wants to democratize everything.  Who cares what lawyers think about other lawyers?  Let’s let everyone rank everyone else.  Also, let’s let clients rate their lawyers the same way Yelpers rate a takeout Korean barbecue joint.  I wasn’t a fan of this, but Avvo forced me to participate.  Why? Because if I didn’t, my rating would languish somewhere around “meh”.

I soon figured out, though, that the Avvo numerical rating may use some of the consumer input, but without any input I could make my number rise.  I put in my educational background, significant cases, CLE articles and lectures, which all increased my rating.  My current Avvo rating is a 9.9 “superb”.  My wife, by the way, still thinks I’m “meh” but I don’t think that has to do with my lawyering.

Back to Avvo.  So I don’t put much stock in Avvo’s 9.9 assessment of me or walk around with a big LED sign over my head saying “superb” like the pig in Charlotte’s Web.  Instead, I just let it sit there.  But I have clients that found my Avvo page.  This is what causes the ambivalence.

When I finish a case, the client usually says “thank you” and we move on.  The closing papers are filed or signed.  We send out any trust account funds and, unless the client has another problem, we don’t hear from the client again.  Avvo has changed that.  Three clients have said some of the nicest things anyone (who isn’t my mother) has said about a lawyer, let alone about me.  The internet, unfiltered, facilitated compliments from clients that reminded me why I like being a lawyer.  The most recent comment was written by a client whom I last represented in 2009.  I haven’t heard from the client in years.  But the things the client wrote meant a lot.

I’m used to reading all the vile and mean stuff that commenters have written in response to articles in the local or national papers.  I’ve seen the stories about the online bullying done through Facebook and elsewhere.  But to have three people take the time to tell the world (or at least the world that looks on my Avvo listing) about their experience with me, that’s what causes the ambivalence.  Because I don’t think Avvo should call me “superb” just because I gave them lots of info for my listing.  But those three clients, they all gave me five stars.  If I was a barbecue joint, people would be lining up around the corner after seeing the ratings on Yelp.

My advice is don’t rely on numeric or star ratings.  They aren’t the guarantee of success or failure.  On the other hand, if you like the lawyer and he or she is competent and cares, that’s what should matter.  Then tell the world on Avvo.

That’s the view of one lawyer from Jupiter, Palm Beach County, Florida.  I’m Marc Dobin and I don’t feel “superb”.

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Merrill Lynch fined for late U5 filing

The U-5, the Uniform Termination Notice, is an important part of the information flow in the securities industry.  When a Registered Representative leaves a firm, a U-5 must be filed.  The firm has 30 days to do so.  Most firms have procedures in place to timely file a U-5.

Merrill Lynch, I am sure, has such procedures.  But those procedures were apparently missed when it came to a Missouri broker named Greg Campbell.  The firm received two complaints alleging theft from customer accounts.  Firms do not tolerate theft from customer accounts.

But when Mr. Campbell left Merrill Lynch and joined LPL, it took the firm a year to notify FINRA of the complaints.  That led to Campbell’s termination at LPL.  But I am sure that LPL would not have hired him in the first place had they known about the complaints.  And that would have avoided $500,000 of theft, the amount reported by the Wall Street Journal that was stolen from LPL customers.  This is on top of the $1.7 million stolen from Merrill Lynch customers.

I have seen situations like this before.  I’m wondering if LPL will go after Merrill Lynch for its failure to timely report, arguing that had Merrill Lynch reported the two complaints, LPL would not have hired the thief and not paid out $500,000 in restitution.  I guess we’ll see.  But it will be in arbitration, so maybe we won’t see unless a decision is reported.

That’s the view of one lawyer from beautiful Jupiter, Palm Beach County, Florida.  I’m Marc Dobin and I’m looking at blue skies outside my window.

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Embezzling broker gets 51 months for his crimes.

OK, so it’s been a while.  What with Thanksgiving, Hannukah, Christmas, New Years and a family trip, I wasn’t that focused on sharing my thoughts with the world.  But today something struck me.  On Wall Street reported that a broker in Washington state was sentenced to 51 months for embezzlement.  How he did it was interesting to me.

First, he was barred from the securities industry and fired by LPL.  Then he convinced his clients (the article was silent on how) to move their accounts to TD Ameritrade.  He then kept their usernames and passwords so he had access to the accounts at any time.  Then, when TD Ameritrade got wind of a potential problem, they barred him from doing business with them.  For some of the victims, this flag wasn’t red enough.  They believed him when he told them that TDA was trying to force him to join their firm.  So the true believers moved their accounts to Etrade where the thievery continued.

This guy had a record.  It could be found on Brokercheck.  But it appeared that the victims didn’t look or didn’t care.  FINRA and the regulators have focused large amounts of time and energy on making sure that Brokercheck is accurate and extensive.  But do people use it?  I think a very small percentage.  I would be surprised if it’s more than single digits percentage-wise.  Instead, it is used by recruiters, lawyers and others in industry (including brokers competing for an account).  The Brokercheck system has been around in one for or another for 25 years (it used to be hard copy).  How much fraud and theft has this really stopped?  I’ll bet it costs more to run the system than the sum of the avoided losses.

So now that he’s been sentenced, he’s truly sorry.  Sorry that he caused pain or sorry that he got caught?

On a small world note, I know the judge.  Judge James Robart was a securities lawyer in Seattle back in the day.  He was a smart guy and a good person.  He said, “This is a crime of greed — pure unadulterated greed — plain and simple.”  He’s right.  Unfortunately, I think that some of the victims of this theft will have difficulties that will last far beyond the 51 months this guy is in jail.


That’s the first view of 2015 by one lawyer from Jupiter, Palm Beach County, Florida.  I’m Marc Dobin.


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PIABA wants mandatory insurance. It won’t work.

Insurance is in the news.  Suzanne Barlyn writes in Reuters that our friends at PIABA want insurance to be mandatory.  Their solution to the unavailability of insurance? Don’t do the business.  My problem with this is that FINRA seems committed to allowing mom and pop small broker/dealers to exist.  The major wirehouses are not going into some town where the population is 1500 and it is under 6 feet of snow for 8 months out of the year.  But a person who decides that this is the business for them could set up an independent office in this fictional town and serve the town’s needs.  If that broker is required to have insurance, the cost may be too high to justify the business.  So we are then left with brokerage offices of only large and regional firms because the small firms’ insurance costs drove them out of business.

PIABA says they’re concerned about the unpaid awards for its constituents’ clients.  But for the most part, those clients are only seeing between 60% and 67% of the award.  The rest goes to the lawyer who may have put $100,000 of time and expenses into a case.  So let’s make sure we understand that the clients’ interests are not the only interests at play here.

When I first started in the securities business I had no idea that there was insurance available to cover brokers’ mistakes.  I worked a major New York wirehouse, Prudential Securities, which was self-insured (in insurance-speak) as far as I know.  In fact, we used to write in our arbitration answers “Prudential Securities is not an insurer against losses.”

So several years later I was surprised to learn about insurance in this business.  When I first learned about it, the coverage was very broad.  And as insurance companies paid out more money, the coverage narrowed.  I’ve represented insureds and claimants against insureds.  In my experience, insurance has its good points and its bad.

The good – a broker who makes an honest mistake has a backstop.  Just like car insurance, good drivers sometimes get into an accident.  That’s what insurance is therefore.  Sometimes you screw up.

It would also provide protection for customers doing business with small brokerage firms with little capital.  The caveat here is that the coverage may be exhausted before you get to the pot of gold.  Most policies use up the liability cap to pay expenses.  So a one million dollar policy, after litigation expenses, may only be worth $900,000.  Also, insurance companies may decide that a series of customer claims constitute one incident under the policy.  So if there is a higher overall limit and a lower per-claim limit, the lower limit would apply.  This leaves less money to pay claims from the policy but the broker or firm only has to pay one deductible.

From a claimants’ lawyer’s perspective, insurance is good because insurance companies don’t like risk.  So if a case has risk, an insurance company wants out.  So even if the case is defensible, the insurance company’s employees and stockholders will sleep better at night knowing that the risk was extinguished.

So that’s some of the good points.

Here’s some of the bad – Insurance companies hate risk.  Didn’t I just say this a good point? you may ask.  I did.  But because they hate risk, sometimes they settle cases for more than a claimant deserves.  Further, insurance companies are not interested in the effect of a settlement on a broker’s record.  They just want to extinguish the risk.  This can cause blowback for the broker in the form of a regulatory inquiry and a ding on his/her CRD report.

The existence of Insurance policies encourages specious claims.  I worked for a lawyer who did not have malpractice insurance for the longest time.  He said that not having insurance discouraged malpractice claims because he got to pick the fight.  Because of the risk-averse nature of insurance companies, a specious claim may still get paid, encouraging lawyers to file claims just to see if they can get a door prize.

Multiple claims could equal multiple deductibles.  Some broker-dealer policies have a low deductible, say $5,000, if only the broker is named but a higher deductible, say $25 or $50,000, if the firm is named.  But those same firms push the deductible back on the broker.  If there are multiple claims naming the firm, and they’re treated as separate incidents, just the deductible alone can crush the broker.

The broker can lose control of the case.  Most liability policies, broker-dealer or otherwise, have a cram-down provision.  The policy allows the insured some input, but the ultimate decision to settle is with the insurance company.  If the insurance company wants to settle and the broker vehemently objects, the insurance company can hand off the defense of the claim to the broker and walk away from any further expense or liability.  So the broker is left in a tough spot.  She/he either has to put their money where their mouth is and try the case on their own nickel or let the insurance company extinguish the debt.

From a pure dollars and cents perspective, if the premium is reasonable, having insurance makes sense.  But in practice, it can wreak havoc with a broker’s license and possibly even attract unwanted claims.  Like everything in life, there’s no clearcut answer.  But in my humble opinion, FINRA will never require insurance for every firm.

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

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Be on the lookout for fake IRS calls.

For the second time in a week, I received a robocall claiming to be the IRS.  It was a computerized voice.  It wasn’t Stephen Hawking playing a joke on me, either.  I don’t know him.  But I guess he could easily disguise his voice.  I digress.

The computer proceeded to tell me that they have been trying to reach me for some time.  If I don’t respond, they will sue me. I was not frightened.

The number they called from was 217.398.9755.  I have not called it.  They called my cell phone, those ba$tards!

They told me to call another number, 323.786.0730, where I’m sure a very helpful “IRS Agent” will be glad to take payment for my tax debt by credit card.  And then buy stuff with it.

Here’s the thing folks.  Unless you moved and left no forwarding address, the IRS can find you.  Not only can they find you, but they will warn you before they get really pissed off.  It is rare that the IRS decides to sue without warning.  And since I pay my taxes, I was certain they were not about to sue me.

So do what I did, report the call to the FCC here.  It says that it is for the Do Not Call registry but they also take info for robocalls.  Take not of the number that called you and the number they asked you to call.  Give the FCC all the info you can.  The FTC recently shut down two tech support scams down here.  Let’s see what they can do about these new fraudsters.

That’s the ticked-off, but tax-compliant, view of one lawyer from Jupiter, Palm Beach County, Florida.  I’m Marc Dobin.

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