BROWSE BY TOPIC
- Compliance Concepts
- Investor Protection
- Investments - Unsuitable
- Investments - Strategies
- Wall Street News
- Bad Brokers
- Investments - Private
- Rules & Regulations
- Bad Advisors
- Boiler Rooms
- Terminations/Cost Cutting
- General News
- Donald Trump & Co.
- Big Banks
- Regulatory Sanctions
Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.
Stay Informed with the latest fanancialish news.
NEWSLETTERS & ALERTS
This Research Analyst ‘Didn’t Give Up His Day Job’
by Howard Haykin
While employed by Stephens, this analyst covered companies in the energy sector – including Flotek. In early January 2017, Flotek announced that it was seeking a full-time employee to handle investor relations ("IR"). On January 13, 2017, Stephens issued a research report authored by the analyst which expressed the view that Flotek’s intention to hire a full-time IR representative was a positive development – and the report reiterated the analyst’s overweight rating for the company [Note the word, “reiterated” - i.e., that he had been bullish on the company for some time.]
IN PURSUIT OF THE IR REPRESENTATIVE JOB.
- Soon After January 13, the analyst expressed his interest in applying for the IR representative position at Flotek.
- On January 26, 2017, Flotek reached out to the analyst to schedule a meeting to further discuss the IR position. By this point, the discussions had reached a level of seriousness, with mutual expressions of interest and the analyst’s candidacy clearly viable.
- At this point the analyst’s candidacy for the position presented a material conflict of interest.
- On January 30, 2017, the analyst met with senior management of Flotek A to discuss the IR position.
- Following that meeting, the analyst sent Flotek management his personal email address.
- Later that evening Flotek emailed Marietta the terms of an employment offer.
- On January 31, 2017, Flotek sent the analyst a formal letter offering him the IR position. That same day, the analyst replied to Flotek that he would return the letter by the date specified in the offer letter, and that he was considering the process for his transition from the Firm.
- On February 15, 2017, the analyst returned the signed offer letter to Flotek.
- On February 24, 2017, the analyst informed his supervisor that he accepted the IR position. That was the first time he told anyone at the Firm that he had engaged in employment discussions with Flotek.
CONTINUING HIS DAY JOB AS A RESEARCH ANALYST WITH STEPHENS.
- On January 30, 2017, Stephens issued a research report on Flotek by the analyst that, among other things, reiterated the analyst’s view that Flotek’s hiring of an in-house IR representative was a positive development.
- On February 8, 2017, Stephens issued a research report on Flotek by the analyst following Flotek’s filing of its annual report Form 10-K.
- On February 9, 2017, Stephens issued a research report on Flotek by the analyst that reiterated his overweight rating.
- On February 10, 2017, Stephens issued a research report on Flotek by the analyst that reiterated the overweight rating and raised the share price target for Issuer A from $18 to $21, which was higher than the price target of any other equity research analyst covering the company.
- The report also raised the share price target for Flotek from $18 to $21, which was higher than the price target of any other equity research analyst covering the company.
BETWEEN A ROCK AND A HARD PLACE. The analyst never told anyone at Stephens that he had engaged in employment discussions with Flotek, and needless to say, Stephens never disclosed a ‘CONFLICT OF INTEREST’ in any of its research reports.
This case was reported in FINRA Disciplinary Actions for April 2019.
For further details, go to ... FINRA Disciplinary Actions Online, and refer to Case #2019061078801.