I heard from a small group that they are leaving Carlin because they are closing the Prop Division Generic Trading and are gonna focus on Institional business? Does any one know anything bout this and can confirm it? I am not trying to start anything just looking to confirm what I am hearing.
Have not heard that, but this came out last week. Its really bad for them. Does anyone know this guy? http://timesunion.com/AspStories/story.asp?storyID=499963&category=BUSINESS&newsdate=7/15/2006
I think this whole thing is horrible. Generic, Ron Scheer, all of them are solid and good business people. To think that some fool would implicate them in some stupid scam really sucks. We had a guy try to use our letterhead to "raise money" with a religious scam a few years back, but we caught him prior to anyone losing any money...he begged to not be turned over to the authorities......tough we said. Anyway, I don't think Generic is going anywhere. I know that even if they lose their appeal on this stupid case, that $3 million won't affect them much. Don
While I do not think Carlin did anything intentionally wrong, this is not a stupid case. If Don thinks it is, that is bothersome. This chap was a registered person at Carlin when he (likely independantly of the firm) perppetuated this fraud. This industry is about self policing and part of that is that fiems are responsible for the actions of those they employ. Clearly Generic/Carlin did not do anything to supervise this guy and were not aware of what a bum he was. They should have known. Don, all these series 7 guys you employ who a like customers getting 100% are your responsibility. To say this is a stupid case implies to me that you are not adequately taking your supervision responsibilities seriously. It is that which you don't know that should scare you not which you do. I hope your compliance lady is aware of what your reps are up to. This applies to all prop firms not just Bright and Carlin.
(Now, maybe I don't have all the facts in which case....) If the guy informed Carlin or had their blessing for running this "investment firm" - then there may very well be some shared responsibility...but I didn't see where Generic was actually involved. Believe me, we are very strict with our traders and our Compliance Officer is very exacting in keeping with all the rules, thus keeping our "squeaky clean" record. My only point is that with hundreds of traders, we can't absolutely guarantee that no one will file bad tax returns, not make child support payments (although we make them sign an affidavit in Nevada for this)...or get involved in some racket. My feeling about Generic is that they have run a good company for a long time.....and if this criminal did this without their knowledge, it might be a bit of a stretch to make them pay his bills for him. (But, like I said, I don't have all the facts). I agree that this kind of thing is horrible and the guy got what he deserved in criminal court. Don
How can you hold Carlin responsible? This guy was making deals on ski slopes and in his house. Was Carlin's compliance dep't supposed to follow the guy home and spend weekends with him? It's unfortunate that these people lost money, but they should be a little wiser when investing money on a ski slope! http://www.oag.state.ny.us/press/2004/mar/mar24a_04.html
Unfortunately Carlin is responsible. I can remember my office manager telling a new group of RR's in 1974 that not only was the firm EF Hutton responsible for the misdeeds of a recently fired broker, but the manager (GSP) was also responsible and both were fined and reprimanded. By the way no one had any idea that the fired broker was dealing in unlisted foreign securities, but that doesn't matter. I know that sounds irresponsible and unfair, but the NASD has it's own rules and regulations. What this guy did was "selling away" and "co-mingled funds". He also violated a number of usc's but Spitzer took care of that end. It doesn't matter if the firm or any individual in the firm knew about it or not. They are responsible period. Ron if you read this I certainly hope you prevail in your appeal but there are thousands of cases just like this. Hopefully any here that do read this will realize when you become a member firm of the NASD you agree to abide by their rules and regulations even if they are ridiculously unfair. Then of course you have the state regulations.
The ski slopes scam has little to do with Carlin closing Generic, IMO. I saw the trend of what Carlin was doing over a year ago and even told my group leader at the time that it's getting somewhat obvious that Carlin wants daytraders out. A business decision nothing more. Would you rather have daytrader groups that keep the minimal amount in the accounts for tons of BP and may $.002-.0025 per share or would you rather have "hedge funds" that pay a penny or share or more and have at least a few mil of investor moneys backing them? I agree with what they did but not their execution. It was shady the way they went about it, with shady fees, mistruths, additional regulations. They pushed out a decent amount of daytraders by basically passing along the hint of "we don't want your business". Surprised Don Bright did not know this.
Don Bright is frightfully aware of what they are doing, and I hear details from traders moving over, but to be frank, I don't think it's good business for me to bring anything up. As I've said before, I have respect for what they've done in the industry. The "last man standing in Nevada" started here a few months back (his words not mine). Don (still evaluating the whole "ski patrol" nightmare)