Do not Text and Drive. It Is That Simple.

What could a comment on text messaging and driving possibly do with a blog that primarily discusses securities and commercial matters? A lot, actually.

Here’s the deal. Too many people are injured or killed because of texting. It’s bad enough that we have a whole host of distractions (some minor, some major) that keep us occupied/entertained/awake in our cars. We eat in our cars. We put TVs and refrigerators in our cars. Some cars now are rolling WiFi hotspots.

Do we need to text? I will admit that, until the other day, I would text from my car on occasion. It’s particularly tempting when I am on those long, boring, stretches of the turnpike north of Yeehaw Junction. (For those of you not in Florida, that is a real place. Look here) Not any more.

Nothing is as important as a life, other than someone else’s. You want to kill yourself because you want to write “ROFLMAO” (which is tough to actually accomplish in a car), that’s your own stupid right. But to take out someone else’s parent, sibling, grandparent, spouse or friend? That’s just plain wrong and selfish.

Here’s why this rant applies to securities. We live in a connected world. A broker doesn’t just sit in an office. They’re on the road, too. And most of them work for commissions, so a lack of communication could result in a loss of income. So could a deadly car accident. Further, if there is an accident and the broker hurts someone, then it may be the firm’s responsibility. Then what happens to the broker’s career?

There are technological advances that will help deal with the temptation. They’re not perfect, because they’re still a distraction, but in my opinion, they are better than texting. Siri, on the Apple 4S, reads texts and allows you to respond by voice. Windows phone will read texts as well. And it does this really cool thing with a Bluetooth connection where it will read the text and allow you to respond by voice.

Android phones allow text by dictation natively. I don’t recall if it will read them. Finally, Blackberry, my weapon of choice, has apps such as Vlingo and that will read and allow dictation. Because my device is a touchscreen, Dragon Dictate for Blackberry is not available. I used it on my Curve and it worked well.

My car will read my texts and emails to me. But I can’t respond.

None of these “solutions” is a cure for distraction. I can’t even tell you if they reduce distraction or if they just make me feel better. But, for the most part, I am not taking my eyes off the road trying to tell if I typed an “f” or a “d”.

I am not advocating banning the use of mobile devices in the car. They have saved me time and heartache countless times. But when I think of the times I texted when I should have just pulled over, I cringe. Not any more. And you shouldn’t either.

That’s enough ranting for one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

Print Friendly, PDF & Email

Amazing Chutzpah – Securities America asks reps to “pinky swear” reports InvestmentNews

So when is a contract not a contract? Or is it a contract? In a bizarre move, Securities America has asked its representatives to sign pledges of loyalty to the firm. The real question in my mind is this – which has more legal validity, the loyalty letter or a “pinky swear”? Perhaps they’re the legal equivalent.

Investment News reports that a letter went out to the sales force and is essentially asking for a pledge to stay. What happens to those brokers who don’t sign? What happens to supervisors whose brokers don’t sign? If a broker leaves, will Securities America pursue him/her for breach of a “pinky swear”?

Who came up with this idea? What will happen if these scenarios occur? 1) a broker is fired for not signing the pinky swear or 2) a broker claims breach of contract because they signed the pinky swear and was later fired for other than compliance reasons. Hmmmm. This won’t keep me up at night, but I’m thinking that this was a retail-side idea and not vetted by lawyers.

That’s the under-90 degree view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

Print Friendly, PDF & Email

Aaron Rents computers, and spies on its customers?

I found this shocking. Aaron Rents, a leading renter of furniture, computers and office stuff, is involved in controversy related to computers it rents. Similar to a controversy last year, where a school district in Pennsylvania was turning on laptop webcams remotely, Aaron’s was apparently doing something similar.

Here’s a new twist, I think. At least one article I read stated that the remote capability was hardwired into the computer. This means that a user would probably not even be able to tell that the computer could spy on him or her. It supposedly could be deactivated with a wand.

This raises all kinds of issues, in my humble opinion. Would this be a violation of the Florida Unfair and Deceptive Trade Practices Act? Does it constitute an invasion of privacy. What Federal laws might have been violated? What other Florida state laws might have been violated? These are all interesting questions that will ultimately get sorted out.

But in the meantime, I remain amazed once again. That’s all from this Lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

Print Friendly, PDF & Email

I’m on Jury Duty

I feel ambivalent about this. I will certainly lose productivity as a result, but why should lawyers be exempt. It’s an inconvenience, for sure, but isn’t it better to have a true cross-section than to limit it only to those people who are unable to figure out a way to get ouit of it?

Trial by jury is a fundamental right. I’ve served on one jury before, a criminal trial in New Jersey. I’m not sure it’s a smart idea to have a lawyer on the jury, but it may be useful to have a legal mind around.

We’ll see.

Print Friendly, PDF & Email

A blast from my past.

When I first started in the brokerage business, I was an in-house lawyer at Prudential-Bache Securities (which then became known as Prudential Securities, which was then purchased by Wachovia Securities, which was then purchased by Wells Fargo Advisors) in charge of the firm’s collections. I had a number of “interesting” cases, one of which involved a firm customer named Robert Bialkin. (Mr. Bialkin passed away in 2000, according to his New York Times obit.)

Mr. Bialkin owed Prudential-Bache money. I remember meeting him in my office. I had information that led me to believe that my physical safety was at risk, so I had the head of the firm’s corporate security department stand outside my office (with his gun discreetly holstered under his suit jacket). My meeting with Mr. Bialkin was uneventful, but unproductive. He was not going to pay the firm the substantial sum he owed.

We started litigation in Boston in Federal Court. We were represented by Bingham, Dana & Gould (now known as Bingham McCutcheon). My direct testimony was submitted by affidavit, as was Mr. Bialkin’s if I recall correctly. Anyway, I became aware that Mr. Bialkin claimed that I had threatened him in my office. He said that I told him something along the lines of “I want my f—-ing money.” I am known to use the occasional profanity, but I recall specifically not using it when talking to Mr. Bialkin. Remember, I was concerned about my safety.

As I said, my direct testimony was by affidavit but I flew to Boston to be cross-examined in front of the jury. Mr. Bialkin’s lawyer asked me if I threatened his client. I told him no. He asked if I had used the profanity I described above. I told him I was certain I did not. He made the fatal mistake of asking me “why?” And I told him what I had learned about his client and that I was concerned about my physical safety. He objected to my testimony, but the jury had heard it. We won the trial.

Mr. Bialkin appealed. I recall the appeal and the briefing. I kind of wish I had it, because it would probably be entertaining reading, like a walk down memory lane. As I recall, one of the appellate issues was whether it was appropriate to allow my less-than-favorable testimony about the background I had developed on Mr. Bialkin and its effect on the jury. The First Circuit ruled here. Mr. Bialkin was unsuccessful. The court essentially said “Your lawyer asked the question. Just because you didn’t like the answer, doesn’t mean it should be stricken.” and upheld the jury’s verdict. That was 1992 (and I can’t remember what I had for lunch yesterday.)

The old saw “Don’t ask a question you don’t know the answer to” sometimes applies. In this case, it sure did.

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

Print Friendly, PDF & Email

A Wharton Professor agrees with me – Indexed annuities ‘terrible ideas’ for seniors

Nobody should be surprised by this. I’ve been telling people for years that Equity Indexed Annuities are the roach motel of investments. Now Investment News has run an article that backs me up. Indexed annuities ‘terrible ideas’ for seniors, says Wharton prof – Investment News

These things are garbage. I really wonder what kind of defect someone possesses to sell them to a customer, particularly a senior. And, now that the insurance industry has gotten their way, they are still not regulated as securities. So any person with an insurance license can sell this junk to the unsuspecting public.

I have discussed this before, and an apologist named Sheryl Moore has called me, written me and blogged about me. She thinks I’m wrong. I’m not and now a Wharton professor agrees. Now if she could only spell my name correctly. She claims to be an industry expert. But she does not claim to be an expert on spelling.

These “products” are hard to understand, difficult to unwind and expensive to own. I can’t fathom why anyone would sell one.

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

Print Friendly, PDF & Email

Little Things Make Me Crazy

My firm is adverse to the same brokerage firm in two arbitrations. They are not particularly big cases, but after more than 10 years of litigating against the same firm, I realized that it appears to be a mindset.

One thing the firm does that is particularly annoying is overuse overnight delivery. This is particularly ironic since I am sure that the firm’s billing policy sent to its outside counsel says that overnight delivery should only be used when necessary. Nearly every corporate client I have promulgates a billing policy that specifically discusses expenses. And they nearly all say that routine correspondence should not be sent by overnight delivery. But it appears that when this firm’s own lawyers, or their staff, make the mailing decisions, they are not required to abide by that policy.
We have received overnight packages from this firm enclosing some of the most unimportant documents in a case. We have received overnight packages (marked for early a.m. delivery by the way) of items that could easily have been sent by email, US mail or fax. Instead, the company wastes its money in a demonstration of self-importance that I have not seen from other litigants.
There are other things going on, too, but I don’t want to spend the time examining a lengthy confidentiality agreement to determine if discussing the firm’s lack of familiarity with relatively easy technologies violates the agreement.
Arbitration was originally designed to be fast, efficient and cost-effective. Some firms have turned it into the same scorched-earth battle that arbitration was designed to avoid. Those same firms, if they would examine their internal processes, would see that efficiencies could be gained through intelligent expenditures and informed use of new technologies. But it’s been at least ten years, and this one firm clearly has not demonstrated an ability to learn much.
That’s the snail mail view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.
Print Friendly, PDF & Email

Bad Language Leads to Arrest of Asset Management CEO

Remember when I blogged about Vincent McCrudden, an investment manager from New York? If you forgot, you can see it here. Back then, I analyzed his situation, tongue-in-cheek, and decided that he needed to have his mouth washed out with soap. Apparently, the Federal government took a different view.
According to this article in Investment News, Asset manager charged with threatening Finra and SEC officials: Report – Investment News, Mr. McCrudden created an “execution list” of people in the government for whom he wanted the home addresses and other contact information. As they say in the airports, “all statements made will be taken seriously.” As a result, Mr. McCrudden was arrested at Newark airport when he returned from Singapore (a nation whose government, by the way, is not known for its tolerance or sense of humor.)
According to the article, Mr. McCrudden offered a reward on his website for the information about the government officials. He also made the statement that “there were too many” for him alone, whatever that might mean. The government saw it as a threat and he was arrested. For those of you following along at home, this would be disclosable on his U-4 if he is registered. On the other hand, simply being charged with a felony, unless it is somehow related to investments, does not require disclosure on his ADV, if he has one.
Although this arrest occurred before the recent horrific events in Tucson, it appears that the government acted properly to make sure that its officials are not in danger. I don’t know if Mr. McCrudden is roaming the streets as of this writing, but he would be wise to keep a low profile.
I’m thinking, however, that updating his filings is pretty far back on his mind right now.
That’s the view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.
Print Friendly, PDF & Email

A must read – “The Big Short”

I just returned from vacation. It is one of the few times during the year that I turn off the cellphone, email and fax. Instead, I spend time “enjoying” my family (they seem to act like it’s a burden) and we all perform an ancient ritual called “reading.”

In my case, I read fictional war thrillers and an occasional book related to my profession. While at the library, I came across “The Big Short”, written by Michael Lewis. For those of you that remember when music came in a form other than CD, he also wrote “Liar’s Poker.” I was fascinated by the simple analysis that ultimate resulted in some people making a ton of money due to the greed and/or stupidity of others.

Basically, Mr. Lewis described several investors, none of whom were big firm Wall Street types, who figured out those teaser rates, and loans that didn’t require any payments, that suckered in countless homebuyers would ultimately crash and burn. Their analysis told them that it would happen in mid to late 2007 or early 2008. And they were right.

These people did not “bet” against the homeowners. They bought Credit Default Swaps and other pieces of garbage that Wall Street devised as a means to make more money. Wall Street did not expect the CDSes and other derivative instruments to blow up in their collective faces. All that these investors did was buy the insurance, for about a 2% premium, on pools of mortgages that had the worst of the worst in them, negative amortization mortgages, teaser low-interest ARMS and teaser rate interest-only ARMs among them.

And these investors just waited for things to blow up. Which they did. Mr. Lewis also describes how the garbage loans were packaged together and, amazingly, the ratings services would give them Triple-A ratings. Somehow, the ratings services believed that if you assembled enough garbage into one can, it smelled like a rose. Hmmmm.

Reading this book reminded me of a situation shortly before the tech market crash in 2000. I was talking to a brokerage executive and we discussed how a fireman in New York had quit his job to write a mutual fund newsletter. We agreed that this was the first indication that the world would collapse. And it did collapse within about 18 months of this discussion.

Lewis serves as a good historian in “The Big Short.” And remember what they say – If you don’t learn about history, you are doomed to repeat it.” Unfortunately, most people don’t remember the saying. Read the book. I can’t say enough good things about it.

That’s the mortgaged, but not underwater, view of one lawyer from Jupiter, Palm Beach County, Florida. I’m Marc Dobin.

Print Friendly, PDF & Email

Employers’ Use of Computer Fraud Act May be Slipping.

My friends at Fisher & Phillips, LLP maintain the Non-compete and Trade Secrets Blog. I have known these folks for a long time and they’re good at what they do. They may be wrong (wink), but they’re good at what they do.

The reason I say that the may be wrong is that we don’t frequently agree on issues relating to stockbroker recruiting. Usually, my friends are representing the brokerage firm and I’m representing the soon-to-be victimized registered representative who’s just trying to earn a living. I’m much more in favor of freedom of movement than they are. And that’s what makes them wrong.

One of the tools in the former employer’s arsenal had been the Computer Fraud and Abuse Act. I have defended cases where the CFAA has been used as a weapon in an attempt to criminalize, or quasi-criminalize, the simple act of accessing one’s clients’ names and addresses to facilitate a move from one firm to the next. Brent Cossrow, of Fisher & Phillips, provides his analysis of a criminal proceeding that analyzes the CFAA and its limits.

The US District Court for the Southern District of New York held that accessing a computer using one’s authorized username and password, and obtaining information he/she was otherwise authorized to retrieve, but for alleged improper intent, is not a violation of CFAA. I’m pretty sure that Brent disagrees with the court’s holding, at least on behalf of his clients who would like to use the CFAA to scare a former employee into settlement. That’s OK. It’s a free country. For now.

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

Print Friendly, PDF & Email