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POGO Podcast Questions FINRA’s Transparency and Integrity

Posted by Larry Doyle on March 6, 2010 12:24 PM |

Regular readers of Sense on Cents know all too well my questions and concerns about the lack of transparency at the Wall Street self-regulatory organization FINRA (Financial Industry Regulatory Authority).

I am a big fan of promoting transparency in order to pursue integrity. Who else is a big fan of the same goals? The Project on Government Oversight (POGO) :

. . . an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open, and ethical federal government.

The efforts of this organization are not compromised by the financial industry or any other constituency. POGO simply wants to promote transparency in order to pursue truth and integrity. I commend them.

POGO’s efforts are also not derailed or diminished by individual rulings in court hearings, including the dismissal of a complaint brought by a FINRA member firm, Standard Investment Chartered. That complaint was recently dismissed and will likely now move to an appeal process. The complaint alleged that Mary Schapiro and other FINRA executives misrepresented (that is, lied) verbally and in the proxy statement used for the merger to create FINRA itself.

I welcome linking to POGO’s 12-minute podcast focused on FINRA for the very simple reason that this self-regulatory organization FINRA still needs to be introduced to America.

What you learn may or may not disturb you. At the very least, I hope it will cause you to wonder if FINRA has truly upheld its charge to protect investors or if it was, and perhaps still is, conflicted and actually served more to protect the industry. Have a listen:

POGO Podcast on FINRA

If you care about the markets, our economy, and our country, please share this podcast with friends and colleagues.

FINRA used the claim of absolute immunity in dispensing its regulatory function as the defense in the Standard Investment complaint. FINRA won. The issue of a lack of transparency, though, goes well beyond one case and one complaint. As readers of this blog have asserted, immunity without transparency is nothing more than a license to steal.

I believe transparency is a prerequisite for integrity. I thank POGO for shining light on FINRA and asking Congress to do the same. Let’s stand up for capitalism and country in the process of promoting transparency within this regulatory organization.


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