FINRA RE-HEARS CASE AGAINST BROKER, TRIES TO UN-SCREW THE POOCH FOR PUBLIC CONFIDENCE
So this is kind of big news coming from the financial sector. FINRA, or the Financial Industry Regulatory Authority, is doing something it almost never, ever does. It’s re-hearing one of its own cases. But why? Well, there are some serious questions about whether the original case’s hearing officer, Jennifer Crawford, had some undisclosed conflicts. So yeah, that’s some significant egg on the regulator’s face. Re-hearing a case like this is not a casual move on FINRA’s part. So the details will prove…. interesting, to say the least. This case from last March resulted in barring Devin Wicker, a former executive, from conducting any business as a broker. As was normal, a three-member FINRA panel ruled against him after the hearing. But this conflict with Crawford requires a closer, more public look at the ruling against Wicker. In other words, FINRA is trying to un-screw the pooch, publicly.
HEARING OFFICER HAD A CONFLICT OF INTEREST, RAILROADS BROKER TO GET NEW JOB?
So what was the conflict? The hearing officer in question was also in talks to move to a job in the enforcement division at FINRA. Yet that’s the very same division that brought the case against Devin Wicker! So yes, that’s a conflict, in a big way. It calls into question whether FINRA had impartiality when it reviewed Wicker’s case. So now FINRA is having to do due diligence to assure the public and the industry that their oversight is above board and…. impartial. But its FINRA’s hearing officers who appoints the other two members who decide each case, including WIcker’s. In Wicker’s case, FINRA accused him of the conversion and misuse of customer funds to the tune of $50,000 in 2016. He was running Bonwick Capital Partners in New York at the time. It ceased operations that year.
BROKER SAYS FINRA PANEL DENIED HIS ATTEMPT TO INTRODUCE EVIDENCE IN HIS DEFENSE
But Wicker contends that it was another staff person who took the funds as they left for another company tasked with managing that IPO. But the 3 person FINRA panel rejected his claim and, according to Wicker, refused to allow him to present poignant evidence relevant to his defense. The panel ruled against him unanimously, forcing him to pay $50,000 to the client in question as well as $10,000 in hearing fees. FINRA says the new hearing will involve all new members. But just the question of a lack of fairness is a stain for FINRA. But this isn’t the only case raising questions about FINRA’s impartiality.
FINRA MAY HAVE A STRING OF VICTIMS WHO NEED REAL JUSTICE, LIKE TALMAN HARRIS
Another FINRA embarrassment that’s getting noticed involves Talman Harris. He found himself wrongfully barred from FINRA membership back in 2014. But this injustice involved a hearing panel set up by Chris Brummer, also known as Dr. Bratwurst. Do you see a pattern here? FINRA seems to have more emerging questions about how their panels are set up, and by who. But in this case, the SEC rubber stamped the ruling against Harris. It may have had something to do with the fact that Brummer’s wife, Rachel Loko Brummer, was an SEC bureaucrat at the time! So there’s a vertitable Pandora’s box opening up with FINRA’s rulings these past few years. A skeptic might just think they were more interested in notches on their belt than real oversight.
With all these pooches to un-screw, FINRA may need to open up a rehabilitative pound.