Category: Marc’s Blog

The latest cold caller, “Mark Sinclair”

So, once again, a cold caller braved the telephone tree to call me. He said his name was “Mark Sinclair.” He told me he was calling from “Myers Associates.” I asked him how to spell the company’s name. He said it was Myers. I can’t find a “Myers Associates” in FINRA’s database.

I can find a Meyers Associates LLP in FINRA’s database. But there is no Mark Sinclair listed as registered in their New York office. There is no person with the name Sinclair in their office. And that appears to be their only office. So I’m not sure where he called from and he blocked his caller ID (first sign of trouble).

So here’s what Mark Sinclair, if that is his real name, told me. He told me that I spoke to someone else from his firm (highly doubtful, if not completely untrue) and that person made a recommendation to me (completely untrue). Mark was calling to follow up with me. How thoughtful is that? A guy I don’t know called me from a firm I’ve never heard of to follow up on a non-existent stock pick. I’m “honored.”

I, of course, asked “Mark” if he had looked me up on the Internet. Of course, he hadn’t. I asked him if he knew what I did for a living. He told me he didn’t. Then I told him. Then I hung up.

Do people fall for this stuff? I guess they must or these guys wouldn’t keep calling. I wish they would stop.

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

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Wells Fargo prevails in a promissory note case, or did they?

Remember the case I was ranting about? The one where Wells Fargo’s lawyers billed for ridiculous tasks and ridiculous amounts of time. They can be found here and here. Well, the award came out. My client was ordered to pay Wells Fargo everything they asked for in principal and interest on the promissory notes. The total was about $169,000. But that’s not the entire story.

My client was awarded $5,000 in discovery sanctions. Wells Fargo did not produce documents in a timely manner. In fact, one file was not produced until late morning on the second, and final, day of the hearing. So now their net is down to about $164,000.

Wells Fargo, as a member of FINRA, had to pay “Member Fees” of $5,200. Now their net is down to about $158,800. They had to pay $200 for a decision on one discovery-related motion. Now the balance is about $158,600.

The panel assessed $3,465 of hearing session fees against Wells Fargo. Now the balance is about $155,135.

The attorneys’ fees, before we had motion practice on the reasonableness of the fees, were just over $154,000. Since we’re rounding, we won’t be precise. But that now brings the net down to about $1,135.

Oh, and my client received an expungement of a defamatory U-5 filing the subject of which is what caused him to leave Wells Fargo in the first place.

So, after nearly two years of demanding payment and litigating, Wells Fargo ended up without a significant producer and ahead about $1,135. I forgot to add in the travel costs for 3 Wells Fargo employees who were witnesses. We’ll call it a wash for them, at best. So they lost a producer and, at best, ended up with no net recovery on the promissory notes.

If Wells Fargo had simply believed my client in the first place, not pursued the promissory note and not pursued the other part of the case (which the firm lost), they would have ended up ahead. Oops.

Not every case goes like this. This was a unique set of facts. But this is one of those times where being on the losing end still feels like a win.

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

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Welcome to the party, Ken Abbas (real name Kumail Abbas) from C.K. Cooper & Co., Inc.

Dear Ken Abbas – As promised, I am mentioning your name in my blog. Unlike you, I like to tell people the truth. You see, you told me that we spoke in October of last year. We never spoke and you know it. Of course, in October of last year, you were working for a different company.

I asked you if you had looked me up on the internet and you said you hadn’t. I looked you up on brokercheck.finra.org and found that you have worked for a variety of unknown and barely known brokerage firms. Prior to that, it seems the only qualification you had for being a broker was working at Enterprise Rent-a-car, Taco Bell and Target after graduating from high school in 2004. Yes, Ken (which is not your real name, that is Kumail), I checked you out. And I’m not sure I would want to rent a car or buy a Big Beef Burrito from you, let alone take a securities recommendation.

You see, dear readers, the cold callers have gotten my name. I don’t know how. But they call me and think that I’m an idiot. I always ask “Do I know you?” and they always tell me about some stock recommendation that they made to me in the past, which is a blatant lie. So, with a relationship based on a lie, why would I do business with them. I can only imagine what they do to older people who are easily confused and not armed with the same information as me, including a healthy dose of skepticism.

Please, cold callers, do your homework. Check me out and then think twice about calling me. Better yet, don’t call me at all.

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

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A farewell to a truly great guy, Boyd Page

Before I was even a lawyer, I had heard of Boyd Page. Boyd had stepped into a case toward the very end and kicked our lawyer’s butt into the Gulf of Mexico. We later learned that, as to the central issue of the case, we were right and he was wrong, but neither side knew that Boyd’s client was lying through his teeth at the time.

Boyd gained a reputation that was bigger than he was. The tale was told that, early on, Boyd told his then-current employer that he wanted to do claimants’ securities work. The firm turned him down so he went on his own. The tale goes on that very early in his nascent practice he recovered a large sum for a client and the rest, as they say, is history. That history included being a founding member of PIABA but a frequent attendee of the SIFMA Compliance and Legal Conference as well.

Whenever I saw Boyd, he always had a smile on his face. He was always warm. Whenever I dealt with him, he always courteous and professional. I think it’s safe to say that he maintained good relationships with lawyers who were customer-oriented as well as defense-oriented. At one point, he represented Ernie Olde, the founder of the brokerage firm of the same name (now Ameriprise) and ruffled a few feathers. But Boyd paid them no mind.

Boyd’s firm was the launchpad for a number of other claimants’ lawyers. In my opinion, they were lucky to have worked with him.

Boyd’s presence will be missed. He was a true gentlemen. Those that remain behind have big shoes to fill.

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

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Further proof of the toothlessness of corporate billing policies.

We are continuing to analyze Wells Fargo’s counsel’s bills. Aside from identical billing entries for both identical or differing amounts, it seems that the firm may have figured out a way to recoup its investment, then waste it, on electronic discovery aids.

There are a number of paired entries where one legal assistant bills a .10 or .20 to tell another legal assistant to input documents into a Summation database. Summation, like the program our firm uses, Caselogistix, is a database that enables the law firm to categorize and search discovery documents, among other things. Then the second paralegal bills for importing the documents into the database and categorizing them.

The irony? I could see no laptop computer on the other side of the table. Summation has “briefcasing” abilities that allows the entire database, including the word index, to be saved on a laptop and used at trial. Caselogistix has the same functionality and I had my client’s entire database on my laptop. The other side, however, had a collection of banker’s boxes and no laptop in use that I could see. Whenever there was a document issue, I could see the senior associate leafing through the exhibit notebooks (one 4 incher and one 3 incher) trying to find a document to address the question. Again, no laptop.

Clients should not be paying for such inefficiency. I had Wells Fargo’s entire notebook in electronic form on my laptop. It was in a pdf file and I could word search it. I had better searching capabilities of Wells Fargo’s exhibit book than Wells Fargo did.

Wake up, corporate America. If you publish a billing policy, enforce it. I represent corporations with billing policies. I follow them. I have clients with e-billing and UTBMS codes. Most billing policies I’ve seen, other than one client that actually was part of FedEx, prohibit the routine use of overnight delivery services. But the fee affidavit I referred to was sent to me by email around 3:30 on Friday afternoon and then a hard copy was sent “Priority Overnight” for delivery Monday morning. I received it before 9:00 a.m. For what reason? Wells Fargo shouldn’t pay for this waste and neither should my client as the recipient of the fee application.

Dear reader (readers?), please instruct your staff about the judicious use of overnight delivery. If I am sent an email, what requirement is there to send a Priority Overnight FedEx, unless you have family members whose incomes depend on the success of FedEx?

I have represented very large corporations, and still do. But there are people within some corporations who seem to feel that a large law firm, with all of its inefficiencies, is the only way to get effective representation. Or the in-house decision-maker feels a large law firm provides “cover.” But when they do this, and pay the bills that contain obvious wastes of resources, how will a law firm ever become more efficient? Paying the bills of a firm that uses Summation in the office but not at trial, but instead sends a high-priced associate to manage the paper, rewards inefficiency. Most firms I represent will not allow two lawyers to attend a hearing without prior permission. Was there permission?

This was a $200,000 collection case. My firm has two lawyers and a paralegal. Wells Fargo is an enormous corporation. Did they think I was going to outgun them with my “vast” resources from the world HQ in Jupiter, FL? At one point they had five people working on this file. That’s two more people than I have in my firm. The staffing on this file was ridiculous as was the billing.

That’s the incredulous view of one lawyer from Jupiter, Florida. I’m Marc Dobin and I billed no one for this blog entry.

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Florida Supreme Court rules – Statute of Limitations Applies to Securities Arbitration

The application of a limitations period in arbitration has always been a source of controversy. FINRA has its famous “six year rule.” But other than that, there didn’t seem to be much order when it came to applying a time limitation. Some arbitrators followed Florida or Federal law, some didn’t. It was the wild west.

Now there is order. The Florida Supreme Court has ruled that Florida law on time limitations applies to arbitration. In a unanimous ruling, the Court held that arbitration is a “civil action” for the purposes of Florida law. Therefore, the justices ruled, the Florida statutes of limitation apply.

What does this mean? First, it means that the time limitation for certain actions may be time-barred. Second, it means that the FINRA “six year rule” may not be the only deadline in play.

And remember the lawyers and regulators who wanted arbitration to be optional? Now arbitration will have the same time limitations as court.

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

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Corporate Billing Policies – Proof They are a Joke.

Within the last 20 years, corporate billing policies have become much more prevalent. This was a result, in my opinion, of lawyers and law firms becoming pigs and billing for ridiculous things and outrageous amounts. Most law firms, chastened by this increased scrutiny, tightened up their billing practices and changed the way they do business. Most clients did so as well.

Well, I found an exception. As I mentioned, I just finished trying a case against Wells Fargo Advisors. In connection with that case, which was tried in less than two days, I submitted a bill for the work my firm did, including costs, to the arbitrators. That bill was in the low $30,000 range. That’s about right for a case of the type and size I was handling.

Opposing counsel, however, apparently did a lot more work than I did. Their bill was over $150,000! That’s not a typo folks. For a two day collection case, with defenses. At the hearing, the law firm sent a senior partner, at a higher rate than mine, and a senior associate, who’s rate was about 75% of mine. Collectively, the firm seems to have billed its client about $10.50 per minute for the hearing.

There are many outrageous entries. There’s a 36 minute entry by opposing counsel to review a two-line email that I sent to FINRA. Then a 12 minute entry to write a two-word response. There’s what appears to be duplicate billing. There’s billing for administrative tasks like changing the due date on a calendar. I saw at least one entry where the file was billed for one legal assistant to tell another what to do.

There’s billing for hours and hours of reviewing the arbitrators’ bios. There’s billing for “organizing arbitrator ranking award information.” I thought that corporate clients stopped paying for administrative tasks a long time ago. Apparently Wells Fargo is in the minority. The firm even paid for legal assistants to update pleading binders, a task that most corporate clients stopped paying for. If you’re a lawyer and you’re reading this, get Wells Fargo’s work. It seems that they either pay for stuff that most clients no longer pay for, or they don’t review their bills closely enough to see that they’re paying for things that their policy, if they have one, prohibits.

When I received this affidavit of fees on Friday, I only looked at the total. Now that we’re digging deep into the bill, we found that this firm, which claims to represent brokerage firms, charged their client to research FINRA rules on whether or not exhibit notebooks had to be exchanged. This is basic stuff. Any firm that does this work would know that there is no such requirement without spending 48 minutes to figure this out. They could have asked their client and only billed twelve minutes for that.

There are plenty more examples of entries that a corporate client should not pay but apparently did.

That’s the view of an astounded lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin and I did not bill my client for this message.

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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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