Wall Street Will Only Go So Far to Help Older Investors

State securities regulators unveiled a plan at their annual meeting last week that zeroed in on the role stockbrokers can play in sounding the alarm that a senior is at risk of being ripped off.

The securities industry and its regulators have been tripping over themselves trying to make things safer for elderly investors. But the new proposal by The North American Securities Administrators Association (NASAA) may have gone too far for Wall Street’s liking.

Stockbrokers say they would like to be able to tell authorities when they suspect that an elderly client is at risk of financial exploitation. So NASAA and others have been working on laws and regulations that would allow brokers to report their suspicions without violating privacy laws. Various proposals also have allowed brokers to decline to execute a transaction for 10 days if they suspect something fishy is going on.

The NASAA proposal would make it mandatory for brokers to report their suspicions. But it’s likely that the industry won’t go for that idea, preferring instead to have the option of looking the other way when they suspect financial abuse.

You can read my story for TheStreet here.

Vanguard Group Fires Whistleblower Who Told TheStreet About Flaws in Customer Security

The Vanguard Group, the world’s largest mutual fund company, has fired a whistleblower who shared information with TheStreet about deficiencies in the company’s customer account security.

Karen Brock, a client relationship administrator in Vanguard’s Scottsdale, Ariz., office, had told me that customers could access their Vanguard accounts even after entering typographical errors in their personal security answers. In my own account at Vanguard, I have repeatedly tested her assertions and found them to be true.

Brock also had detailed the complaints of a customer who said that he had asked his son to mimic his voice to test Vanguard’s “Voice Verification System.” Vanguard’s system allowed the son to gain access to the father’s account, Brock said. She also shared an internal training document where the names, email addresses, phone numbers and account numbers of several current or prospective clients had evaded the redaction process.

You can read my article about Brock’s firing here. You can see the original article that led to the firing here.

Angry Twitter Users Make Day Even Worse for Online Brokers

As if a turbulent day for stocks wasn’t problem enough for investors, glitches in the websites of many brokerage firms added to the public’s headaches today.

Testy customers took to Twitter to blast their brokerage  firms and mutual fund companies for Web sites that had crashed, leaving them unable to execute trades in a volatile market.

As always, euphemisms abounded. Brokerage firm spokespeople said they had “a slowness issue,” or “a brief period of sporadic Web site inaccessibility,” and the like. But a crash? Not us.

Investors weren’t buying it. “@TDAmeritrade seriously? your servers are crashing today,” wrote one customer. And another: “What a disaster. Time for a new broker.”

You can read my article for TheStreet here.

Antilla Talks to CNBC Squawk Box
About Security at Vanguard Group

CNBC’s SquawkBox invited me in yesterday to discuss my story about The Vanguard Group’s online security. A whistleblower has been speaking with me on the record about a complaint she filed against Vanguard with the Securities and Exchange Commission. You can read the article here.

And here’s the CNBC video:

Is Vanguard Making It Too Easy for Cybercriminals to Access Your Account?

A whistleblower has gone to the Securities and Exchange Commission with complaints about the security of customer accounts and information at The Vanguard Group.

The world’s largest mutual fund company told me that its security is strong. But the whistleblower, who spoke to me on the record about her complaints, disagrees. You can read my latest column for TheStreet here.

Investor Warning: Keep an Eye on J.P. Turner Brokers After Shutdown

The good news: A problem brokerage firm is shutting its doors.

The bad news: A lot of its bad brokers will be finding work elsewhere.

I wrote about the shutdown of Atlanta-based J.P. Turner Associates in my latest column for TheStreet. You can read it here.

Your Stockbroker Loves You — Until It’s Time to Put Your Interests First

If you read the warm-and-fuzzy ads and Web site copy, you’d be convinced that you were  a VIP in your stockbroker’s life. So why would your best-pal broker not want to work under a standard that he or she put your interests first?

The sad answer is in my latest column for TheStreet. You can read it here.

Wall Street Makes It Hard to Dig Up Dirt on Your Broker or Brokerage Firm

The securities industry doesn’t like the idea of reminding investors to check the records of their stock brokers. So when Finra suggested that there be a hyperlink on brokerage firms’ home pages to take customers to its BrokerCheck tool, the industry went on a letter-writing campaign to oppose it.

My personal favorite: The brokerage firm chief compliance officer who told Finra he was worried about “unscrupulous investors.” Yep, you read that right. Here’s my column for TheStreet on Wall Street’s latest anti-investor campaign.

Indicted Lawyers, Peeping Toms, Can Wind Up Judges in Finra Arbitration

Finra arbitration is often a surprise to investors — not least of all because so many Wall Street customers have no idea that they sign away their right to court when they open an account.

But how about the surprise of learning that one of your arbitrators had been indicted? Or that he had said he was a lawyer, but wasn’t?

My June 24 column for TheStreet tells about Finra’s latest surprise arbitrator — the guy who was arrested for being a Peeping Tom. Really. You can read it here.

Antilla 2015 Awards

Earlier this month, the New York press club The Society of the Silurians said I’d won its “Excellence in Journalism” award for my online columns for TheStreet.com.

From the judges: “In these searing columns, Antilla highlights the anti-consumer sentiment that has taken hold of significant portions of the Republican Party as it attempts to distance agencies such as the Consumer Financial Protection Bureau.”

My stories also have been entered into the national competition for The National Federation of Press Women, which said this week that I’d won first place in two of its “at-large” contests, which include 27 states that don’t have direct affiliations with NFPW. One winning entry was for my columns for TheStreet about the fleecing of senior citizens by stock brokers. A second winning entry was in the feature category, for my article in The New York Times about sex discrimination at Sterling Jewelers, the biggest retail jewelry operation in the United States. The winners in the “at large” categories have been entered into NFPW’s national competition.

Study Hard and You’ll Become Financially Literate? Not So Fast

For Financial Literacy Month, I put together a reading list, an “investor help” list and some videos for TheStreet Foundation.

The reading list is here.

The “investor help” list is here.

Here’s an interview I did with Helaine Olen, author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.

And here’s a Q&A with Remar Sutton, volunteer chairperson at FoolProof, a rare financial literacy effort that actually gets results.

Looking To Get Financially Literate? Don’t Expect Business “Educators” to Help

April is Financial Literacy Month, which is supposed to be a time when we marvel at the progress we’ve made in making the public smarter about finance.

Yet after nearly two decades of effort, the studies not only show little progress, but actual backsliding in the public’s financially savvy.

The problem has much to do with who’s in back of most literacy efforts: business. A credit card company isn’t going to warn you not to spend more than you can pay off in a given month, and a brokerage firm isn’t going to send you to Finra’s BrokerCheck to be sure you’re broker isn’t a sleazeball.

I wrote about the problems with literacy efforts in my column for TheStreet. You can read it here.

Like Anita Hill vs. Clarence Thomas, Ellen Pao Lost Kleiner Perkins Gender Fight But Women Gained

Sometimes, even a loss can be a win.

A San Francisco jury said last month that Kleiner Perkins Caufield & Byers did not discriminate or retaliate against its former junior partner, Ellen Pao. From my column for TheStreet.com:

The four-week trial had received intense media coverage for its allegations of porn-star talk in business settings and exclusion of women from company events. Rather than invite a woman on a company ski trip, “Why don’t we punt on her and find 2 guys who are awesome?” a Kleiner partner suggested in an email.

Pao lost. But women didn’t. The case brought huge attention to workplace issues that rarely get aired. Most employers require employees to agree to give up their right to sue before they even show up for the first day of work. So-called “mandatory arbitration” agreements keep gender discrimination complaints out of the public eye, and leave violators of our discrimination laws unaccountable.

You can read my column here.

Wall Street Waging War Against Making Brokers Accountable to Investors

Securities and Exchange Commission Chair Mary Jo White told members of the House Financial Services Committee yesterday that there would be “many challenges” in changing the rules so that stock brokers and investment advisers are similarly regulated.

That’s an understatement. Wall Street has been on a tear for years fighting efforts to demand more of stock brokers. From my column yesterday for TheStreet:

As things stand today, brokers need only sell “suitable” investments that match a client’s investment profile. But they needn’t act as fiduciaries who are duty-bound to put clients’ interests ahead of their own, as investment advisers are expected to do.

You might think it’s a no-brainer that people doing essentially the same job in the financial industry should be subject to the same rules, but you’d be thinking wrong.

There are two fights going on related to the duties of investment advisers and brokers. There’s the one Ms. White has a say in: Changing the rules so that brokers and advisers both are expected to put their clients’ interest ahead of their own — a so-called “fiduciary duty.” And there’s another related to retirement money. The Department of Labor would like to raise the standards for people giving advice in that arena, too. President Barack Obama publicly supported the idea on Feb. 23.

The unsightly battle that has Wall Street fighting to avoid a more ethical approach to its customers is the latest reminder of the gap between the way the industry portrays itself in its marketing, and the way it actually treats its customers. From my column:

“These guys advertise like doctors and lawyers and litigate like used car salesman,” said Joseph C. Peiffer, president of the Public Investors Arbitration Bar Association, or Piaba, a group of lawyers who represent investors in securities arbitration.

You can read the story here.

Ellen Pao’s Case Against Kleiner Perkins Has Porn Star Talk, High Stakes for Women

Twenty years ago, there was Smith Barney’s Boom-Boom Room. Today, it’s Ellen Pao v Kleiner Perkins, the very high-profile sex discrimination trial that’s been going on for four weeks in San Francisco Superior Court.

Pao was a junior partner at Kleiner from 2005 to 2012, when she was fired. She says the firm discriminated against her, leaving her out of important meetings and passing her over for promotion while men moved ahead. Kleiner says she was a difficult employee who had a “female chip on the shoulder.” I wrote about it in my column today for TheStreet.com:

Among the affronts she has shared with the jury are the story of the female partner on a business trip who opened her hotel room door to see an uninvited Kleiner partner holding a bottle of wine and wearing his bathrobe; the co-ed business flight on a private jet where the conversation turned to porn stars; and the Kleiner meeting where a male partner approached a female partner to ask her to take notes. When the woman declined, he asked Pao to do it.

If Pao loses, it won’t bode well for women with grievances in the future. Women considering a lawsuit could wind up being warned “You know what happened to the woman in San Francisco,” said Linda Friedman, the Chicago lawyer who brought gender suits against brokerage firm Olde Discount Corp. in 1995, Smith Barney in 1996 and Merrill Lynch in 1997. You can read my story here.


4 Things Kleiner Perkins Doesn’t Want Jury to Hear in Ellen Pao’s Sex Bias Case

Oral arguments are expected to begin Tuesday in the sex discrimination case against the powerful Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.

Ellen Pao, who sued Kleiner nearly three years ago, accused the firm of gender discrimination, failure to prevent discrimination and retaliation. I wrote about her case in my column for TheStreet last week.

Pao, who is interim CEO of the micro-blogging site Reddit, says that after she complained of discrimination at Kleiner, she went from being a star among junior partners to an employee viewed as a whiner who had “issues and clashes” with colleagues. She says one coworker badgered her into having an affair, and that a partner at the firm gave her a copy of a book of poetry with sexual imagery.

Kleiner has asked the judge to clear the courtroom when there’s evidence being presented about its proprietary business information and financial performance, among other things. Even if it wins on that motion, there are sure to be plenty of fireworks that remain for public consumption.

When Pao filed her suit in 2012, I noted this about the sad history of women in the workplace a column for Bloomberg View:

Twelve of Kleiner’s 49 partners are women, and in the venture-capital business, that’s considered very, very good. How is it that 20 years after Anita Hill broke the silence about gender discrimination and harassment at work, there are still companies that can take a bow for being gender-equality heroes when 75 percent of their leaders are men?

You can read the Bloomberg column here. The more recent column for the Street is here.

Why Only Big Bankers Can Flout the Rules and Get Away With It

Did you hear the one about the stock promoter, the lawyer, three figurehead CEOs and seven auditing firm partners?

No, it isn’t a “walks into a bar” joke. It’s a case brought by the Securities and Exchange Commission last month against the players in a sham stock offering. The agency went after all the people involved in what it called ”a massive scheme to create public shell companies through false registration statements.”

No big deal, right? The SEC is supposed to be going after bad guys, making them pay fines and lose privileges. But it tends to do a lot better in cases against no-name boiler room types like the ones in the January case than it does with players at powerful banks.

In my column for TheStreet this week, I discussed the contrast in enforcement results between cases against small players and cases against Wall Street’s elite.

In December, for example, the Financial Industry Regulatory Authority, or Finra, brought cases against ten household name firms for flouting the rules that govern research analysts when their firms are pitching for initial public offering business. In its complaints against the firms, Finra described the actions of specific people who broke specific rules. But we never learned their names. Indeed they weren’t charged at all.  You can read my column here.