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FINRA’s Enforcement Chief, Susan Merrill, Has Some Set of Balls

Posted by Larry Doyle on March 19, 2010 7:36 AM |

I have grown accustomed to some truly shocking developments and resulting statements throughout the course of our economic crisis. That said, the statement I read late last night from the soon to depart Chief of Enforcement at FINRA, Susan Merrill, left me absolutely aghast.

As reported by the financial industry newsletter, Investment News, Ms. Merrill said she was,

“especially proud of the actions we brought regarding auction-rate securities….as well as vigorous actions to shut down Ponzi schemers.”

Wow. With that reflective comment on her FINRA tenure, Ms. Merrill must believe people do not read these comments, they have no understanding of their context, or America is simply stupid.

Well, Ms. Merrill, I do read these comments. I do have an understanding of their context. I would like to think I am not stupid, and I welcome sharing my reaction with the American public.

In my opinion, you have some set of balls. I have met a lot of arrogant people on and off Wall Street, but with that statement you just elevated yourself to a special spot in the Halls of Arrogance along with a special corner in the Sense on Cents Hall of Shame. I say that with the appropriate level of respect.

Why do I accord you these “honors?”

According to the FINRA 2008 Annual Report, FINRA has been involved in successfully returning a few billion dollars of funds frozen in auction-rate securities. We are talking a few per cent of the total of $150 BILLION in frozen ARS.

Proud? You are easily pleased if that performance makes you proud.

If you want to earn the pride and respect of the American public and especially those investors whose funds remain frozen in outstanding auction-rate securities, let your conscience guide you to release all the details regarding the liquidation of FINRA’s own position of $647 million auction-rate securities in mid-2007. Do you have knowledge of this transaction? What can you share?

Did you truly say you were proud of the work FINRA did in unearthing Ponzi schemes? Tell me you did not make that statement. If in fact you made that statement and I am assuming the Investment News reporter quoted you accurately, then, in my opinion, you just pissed upon every respectful investor worldwide who was entangled in the Madoff Ponzi scheme.

If you want to earn the pride and respect of the American public, then perhaps you can compel your fellow FINRA executives to provide full and total transparency into the organization’s books and records. I call on you to address the allegation embedded in the Amerivet Securities v FINRA complaint claiming FINRA actually invested money in Mr. Madoff’s Ponzi scheme. I call on you to address the real nature of Mr. Madoff’s relationship with FINRA and former FINRA head and current SEC Chair, Mary Schapiro.

While you may be proud, real professional pride and respect are measured in terms of how others view you not how you view yourself.

How do you think the thousands of investors whose lives have literally been devastated by the auction-rate securities and Madoff scandals would measure you?

Your time to be measured, though, is not over. You do have the opportunity to regain a serious measure of pride and respect in the eyes of those whom you were charged to protect. How might you do that?


America wants answers. Start with the questions I have put forth and go from there. At that point, you will begin to earn the pride and respect which does not come from cheap and shameless self-promotion.

In the meantime, Reps. Kanjorski, Issa, and Frank, are you listening? Perhaps you can compel Ms. Merrill to talk and release details to the above questions and many more.


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  • Ted K

    This is outlandish, catastrophes, and, well…. annoying. I thought the Catholic Church had the monopoly on self-regulation. Darn those jerks at FINRA. Someone at National Review better get on this case.

  • Corruption Finder

    In 2008 we had a financial meltdown, starting with Bear Stearns, Lehman, and Merrill. All of these brokerage firms were and continue to be directly monitored and regulated by FINRA. The SEC stands by and oversights FINRA, which in reality means, the SEC does nothing! FINRA is the actual entity in charge of monitoring the financial problems of broker/dealers.

    FINRA’s major responsibility is to ensure brokerage firms don’t have a meltdown. Therefore, FINRA’s major responsibility in 2008 was to keep brokerage firms from destroying the financial system and economy. The result – absolute failure. The person in charge at FINRA for the past decade? No other than Mary Schapiro. Strike one Mary!

    In 2008 and 2009 the two largest ponzi schemes were discovered – Madoff and Stanton – but FINRA and the SEC had been notified by many experts that these schemes were taking place for years and these regulators did absolutely nothing about it. FINRA took a little responsiblity for this failure, but they should have taken all of it. FINRA was responsible for Stanton and should have known about Madoff. The result – complete failure by Mary Schapiro and FINRA. Strike two Mary!

    In 2008 or 2009 Bernie Madoff stated that Mary Schapiro was a “dear friend” of his. The result – if Mary Schapiro can’t smell a rat when its her dear friend, how is she going to smell a rat when its hiding? Strike three Mary!

    In 2008 and 2009 Harry Markopolos testified that “FINRA deserves an “A+ for corruption” and that FINRA was “in bed” with the industry. Who led FINRA for the past decade? Mary Schapiro. Strike four Mary! Wait a second, how many strikes does Mary get. Oh that’s right, she a girl!

    Further, in 2008 FINRA’s investment portfolio decreased by $568 million or over 25% in 2008. This occurred while Mary Schapiro had the best minds on Wall Street to pick from. So Mary Schpiro failed in running FINRA’s investment account!
    Strike five Mary! Hey, can’t someone else bat for Mary!

    So what else could go wrong with FINRA in 2008? Well, in 2008 regulatory fines decreased to $35 million from $77.6 million in 2007 or 55% decrease and from $184 from 2005 or a 80% decrease from 2005. The person in charge of FINRA during this time – Mary Schapiro. Strike six Mary! C’mon enough is enough! Let someone else bat!

    So by looking at Mary Schapiro’s regulatory success in 2008 – one would have to say, it was complete and utter failure.

    After looking at all of her failures, surely Mary Schapiro couldn’t have been paid a bonus in 2008? Right? Please say it ain’t so Mary?

    You need to understand that FINRA is a self-regulator, controlled and operated by brokerage firms, with the large brokerage firms controlling FINRA. FINRA is not controlled or operated by the public. The public does not pay Mary Schapiro’s salary or bonus, but rather, the brokerage firms pay Mary Schapiro. So whose interest do you think Mary Schapiro has at heart? The pulbic’s or broker/dealers? You got it! The brokerage firms. So how much did Mary Schapiro get paid in 2008. Get an air bad, because this is going to make you sick!

    In an recent Bloomberg article it states that “Mary Schapiro received a $937,961 salary and other pay in $565,995. And I know what you’re thinking. That’s a lot of money for a regulatory. But wait there’s more (just like the infomercial). In 2008, Mary Schapiro recieved a bonus of $1.75 million. What?????? For complete and utter failure she received $1.75 million or 115% of her salary and other pay. This is insane! But wait folks this is not all!

    In 2008 Mary Schapiro was also paid another sum of money! This sure seems strange to me and has been challenged by some on Wall Street. So get your air sickness bag! Mary Schapiro was paid $7.2 million in her “defined-benefit plan.” What???? Mary Schapiro was paid $7.2 million in tax free money for complete and utter failure! And she is paid this as she heads to the SEC. This is over 450% of her salary and other pay! What the heck is going on!

    C’mon, this stinks to high heaven and reminds me of the great quote from the movie Apocalypse. “Smell that? You smell that?…..that’s Corruption, son. Nothing else in the world smells like that. I love the smell of corruption in the morning…….”.

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