Securities Industry Commentator by Bill Singer Esq

July 31, 2019
The InterContinental Hotels Group ("IHG") franchises, leases, manages or owns over 5,600 hotels (including Holiday Inn) Iand nearly 843,000 guest rooms in more than 100 countries. As stated in part in the IHG Press Release, the hotelier:

will switch to bulk-size bathroom amenities, with the transition to be completed during 2021. Building on its efforts to reduce plastic waste as part of a broader sustainability agenda, this pledge makes IHG the first global hotel company to commit all brands to removing bathroom miniatures in favour of bulk-size amenities.

In case you don't understand the dire consequences of this seemingly innocuous "transition," IHG is getting rid of all those cute little bottles of shampoo, conditioner, and body soap that you all "borrow" (a/k/a "steal") when you're a guest. You folks smugly grab the "free" mini bottles and all the loose cotton swabs and seem to think that it's all included in the cost of the room. Some of you even take bars of soap. By the way, anyone know what the difference is between a bar of soap and liquid body soap? Are they interchangeable but for the fact that one is a solid and the other a liquid? Can you use the bar of soap on non-body parts? Like what would you use it on by way of example? In addition to all those cute little bottles of soap and soap-like product, some of you take rolls of toilet paper and boxes of tissues. 

Now what the hell are we . . . I mean "you" supposed to do? What's the protocol with "bulk-size bathroom amenities?" Can you just remove the dispenser from the bathroom wall and place it in your luggage? Can you fill up a baggie with shampoo or conditioner? 

And what the hell is with the spelling of "favour" in the IHG Press Release? It's f-a-v-o-r. At least that's how the Queen's English gets spelled in the United States of America. Maybe favour is how IHG spells it because the company is based in the United Kingdom, but if the company is really serious about reducing waste, why the hell do you need to add a useless "u" in "favour?"

In any event, I can't wait to see what IHG means by "bulk size bathroom amenities." If any of you are seasoned business travelers, do you know where hotel security draws the line between tossing a few mini-bottles of shampoo into a suitcase and charging you with theft for helping yourself to a quart bottle of shampoo?  

I can't get free plastic grocery bags from my local grocer, which is great for the environment, except now I don't have any plastic garbage bags in which to put my kitchen waste, which means I gotta go out and buy a box of plastic garbage bags to replace the plastic grocery bags that I recycled as garbage bags. Anyone got any thoughts on the etiquette of siphoning a quart or so of shampoo from a bulk dispenser in a hotel? Will the hotels also be leaving bulk amounts of mints on our pillows? I'd love a pound size piece of dark chocolate mints -- and, hey, you could leave a box each night too, it wouldn't hurt.
A very nice bit of reporting by author Al Root, who explains the mechanics of Wall Street's inside game via the interplay among short sellers, options, lock-ups, and secondary offerings.

FINRA Fines and Suspends Former Morgan Stanley Stockbroker for Undisclosed Settlement of Customer Complaint. In the Matter of Eric Nichols, Respondent (FINRA AWC 2019061700301)
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Eric Nichols submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In accordance with the terms of the AWC, FINRA imposed upon Eric Nichols a $5,000 fine and a 15-business-day suspension from associating with any FINRA member in any capacity for violations of FINRA rule 2010. The AWC asserts that Nichols was first registered in 1996 with FINRA member firm Morgan Stanley. As set forth in part in AWC:

In August and September 2016, while registered through Morgan Stanley, Nichols recommended that customer JG make investments in the preferred stock of one issuer. JG also made additional unsolicited investments. By July 2018, the issuer had suspended its dividend payments, and JG had incurred significant unrealized losses in the security. In August 2018, JG complained to Nichols, both verbally and in writing, about the unrealized losses that he had incurred and the fact that the dividend payments had been suspended. In September and October 2018, Nichols wrote two checks to JG totaling approximately $28,000 to settle JG's complaint. Although Morgan Stanley was aware of JG's complaint, Nichols did not disclose to the Firm that he had written checks to JG to settle the complaint.
It started with an anonymous tip to FINRA's Securities Helpline for Seniors. It progressed to a FINRA on-the-record interview. It ended with a Bar. All of which demonstrates how whistleblowers and tipsters can make Wall Street regulation more effective. 

Schwab Loses Non-Solicitation Arbitration Against JP Morgan and Former Rep. In the Matter of the Arbitration Between Charles Schwab & Co., Inc: Claimant, v. Gregory Hugh Jones and J.P. Morgan Securities, LLC, Respondents (FINRA Arbitration Decision 19-00616)
In a FINRA Arbitration Statement of Claim filed in February 2019, FINRA member firm Charles Schwab & Co. asserted breaches of contract, and the duty of loyalty; misappropriation of trade secrets under the Defend Trade Secrets Act ("DTSA") and  the Texas Uniform Trade Secrets Act ("TUTSA"); tortious interference with contract and prospective business relations; unfair competition; civil conspiracy; and aiding, abetting, and participation in breach of the duty of loyalty and other unlawful conduct. As set forth in part in the FINRA Arbitration Decision:

[T]he causes of action relate to Claimant's allegations that, as one of Claimant's registered representatives, Jones signed a confidentiality and non-solicitation agreement (the "Agreement") and the agreement was violated after Jones resigned and became J.P. Morgan's registered representative. Claimant asserted that Respondents used, and intend to continue to use, confidential trade secret information belonging to Claimant concerning Claimant's clients, in order to solicit those clients and induce them to terminate their relationship with Claimant.

Respondents generally denied the allegations and asserted various affirmative defenses. The FINRA Panel of Arbitrators denied Claimant Schwab's claims and prohibited the parties from:

seeking an extension of the Stipulated Final Judgment Granting Preliminary Injunction entered on June 4, 2019 by the United States District Court for the Northern District of Texas in the case styled Charles Schwab & Co., Inc. v. Gregory Jones (Case No. 4:19-cv-180-A).

Convicted Money Launderer Indicted for Fraudulent Scheme (DOJ Release)
Yannick A. Minang pled guilty in the United States District Court for the District of Massachusetts, to a five-count Indictment involving a Business Email Compromise scheme ("BEC"). Apparently Minang was restless because he was Indicted on five counts of wire fraud, one count each of unlawful monetary transactions and money laundering conspiracy.As set forth in part in the DOJ Release:

[M]inang conspired with others to open numerous bank accounts in Massachusetts in the name of sham companies, as part of an apparent BEC scheme, which is a sophisticated scam often targeting businesses involved in wire transfer payments. The fraud is carried out by compromising and/or "spoofing" legitimate business email accounts through social engineering or computer intrusion techniques to cause employees of the victim company (or other individuals involved in legitimate business transactions) to transfer funds to accounts controlled by the scammers.

Through the use of fraudulent invoices and spoofed email accounts, Minang allegedly conspired to trick the victims of the scheme into wiring hundreds of thousands of dollars to bank accounts under his control. Minang and his co-conspirators then transferred funds from the accounts to others located overseas.