Blog - Securities Litigation Support, LLC

FINRA Virtual Arbitrations and Mediations

July 13, 2020 By Greg Wood

FINRA Dispute Resolution announced they are postponing all in-person hearings that are scheduled to commence on or before September 4, 2020. The OHO will be rescheduling these with agreement of the parties.

FINRA Dispute Resolution offers virtual hearing services (via Zoom and teleconference) to parties in all cases by joint agreement or by panel order. These services provide high-quality, secure, user-friendly options for conducting video and telephonic hearings and sharing documents remotely. I learned on a recent webinar that virtual single-day and multi-day virtual hearings have already taken place with more scheduled. Read more »

Regulation Best Interest (“Reg BI”)

July 31, 2019 By Greg Wood

The securities rules are changing and retail investors should benefit.

Earlier this year the SEC adopted a new set of rules designed to enhance investor protection while preserving investor product access and investor choice related to how investors get and pay for their advice and the advice givers with whom they work. This series of rules known as “Regulation Best Interest” imposes new standards of conduct on broker-dealers that substantially enhances their responsibilities beyond the current suitability obligations. While not totally there, these new rules move the securities industry closer to the fiduciary standard currently applied to registered investment advisor relationships. Read more »

Securities Order Types: A Brief Overview of Common Order Types

April 2, 2019 By Greg Wood

I recall being a stockbroker trainee who was confronted with new concepts and terminology. Then, most of the customers purchased individual stocks some bought bonds and a few purchased mutual funds. The types of orders a customer would give were linked to both his position in the stock market and the customer’s trading strategy and/or methodology. To the novice, these orders that sound simple can become complex and confusing when price and time qualifiers are added.

Market Order
A person wanting to buy or sell a specified number of shares of a specific stock immediately regardless of price would simply enter a market order. Read more »

Basis Point Confusion – What Are “Bips”?

February 13, 2019 By Greg Wood

Frequently in a hearing a witness when testifying about a managed account will refer to the cost in “bips.” The statement might be “the management fee was 75 bips.” A “bip” is securities industry trade jargon for a basis point. A basis point is 1/100^th of a percent. So, a fee of 75 basis points would be ¾ of one percent.

Portfolio management fees are expressed on an annual basis. So, a $100,000 portfolio with a management fee of 75 basis points would cost the investor $750.00 annually. Read more »

Buying Stock on Margin

February 1, 2019 By Greg Wood

From time to time, I am asked how margin in the stock market works. Here is a simple explanation of how the basic leverage works. Margin is leverage and leverage magnifies both profits and losses. But, that is only part of the story . . .

Stock Goes Up $5.00 Per Share

Assume you purchase 1,000 shares of DEF priced at $10.00 per share. Your total purchase is $10,000 plus commission and fees. (For this example, we will assume there were no commissions or fees.)

You now owe the brokerage firm $10,000 on settlement date. Read more »

CRD, Form U4 and Form U5 Confusion

December 18, 2018 By Greg Wood

The Important Difference Between Central Registration Depository Forms & Forms U4, U5

Well, it happened again last month. A testifying fact witness became confused about the Central Registration Depository (“CRD”), forms U4 and U5. He showed his unfamiliarity with this system by testifying that a certain activity would give the registered person a bad U4. He was confusing the form U4 with FINRA’s CRD System. An industry panel member would have picked up on this and the witness would have lost credibility. Read more »

Why Get A Professionally Prepared Forensic Accounting Report

December 11, 2018 By Greg Wood

Over the years, I have received calls from attorneys asking me to be an expert witness on a particular case. After we discuss the issues at hand, if appropriate to the subject matter, I always ask if they have hired a forensic accountant to analyze the transactions relating to the case. I get one of several responses beyond yes:

“My assistant is good with Excel and is preparing one.”

This is often a trap for the attorney and the case. I have been in these situations before and have found that the attorney-prepared accounting reports frequently lack necessary detail, schedules, accuracy and completeness that makes them unusable in a FINRA hearing. Read more »