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“Executives Typically Refrain from Criticizing FINRA or its Policies Publicly”

Posted by Larry Doyle on November 17, 2010 7:25 AM |

When I worked at JP Morgan, we had a year end review process that I believe was largely a joke. Why? It lacked integrity and honesty. How so? Individuals largely gamed the system by not being forthright with each other. As a result, the overall assessment of individuals, departments, divisions, and the firm itself were skewed. I recall looking at the composite and average scores and remarking to my boss, “Our people and our firm are NOT this good.”

Mind you, JP Morgan had and still has some real strengths — but it also had some real weaknesses. Excessively bureaucratic would be a good start on the ‘weakness’ list.

I did try to grade myself and others in an honest and constructively critical fashion. Some of my reports would come to me after the fact inquiring about my assessments of them. They would often be concerned. I would respond that I had little interest in ‘gaming the system’ but I had every interest in making them a stronger and more productive employee. My being forthright and honest was “the means,” their improving and becoming more productive was “the ends.”

I raise this topic today because every individual and every organization needs a very healthy dose of constructive criticism.

For those organizations charged with serving the public interest, the criticism should be public. Without somebody willing to dig into an individual’s and organization’s shortcomings, highlight them, question them on it, and pound the table if need be, will the individual and organization truly be held accountable and will the public be served?

The last few years of digging through annual reports, legal briefs, customer complaints, white papers, research reports, and more has enlightened me to the reality of what I have defined as the “Wall Street-Washington incest.” To wit, I am happy to be a constructive critic of those whom I believe have been intimately involved in this dynamic while not serving the best interests of the American public. Against this backdrop, I raised my eyebrows yesterday when reading:

Brokers and executives typically refrain from criticizing Finra or its policies publicly. (Investment News, November 17, 2010)

Really? The above line was included in an article yesterday in the financial newsletter referenced above. In light of my voluminous writings about FINRA over the last twenty-two months, I was obviously out sick the day that ‘memo’ was distributed!!

Allow me to comment further.

As readers of Sense on Cents are well aware, my greatest constructive criticism since launching my blog/website has been directed at Wall Street’s self-regulator FINRA. I do not write for shock value. I write to help people ‘navigate the economic landscape.’ That service obviously includes extensive commentary on the markets and market structures, including the financial regulatory system. Regrettably, many people within the industry have commented to me privately that they do not openly comment or constructively criticize FINRA for fear of retribution within their own business. I am very dismayed to hear people make that statement. That’s not America. People should not only be free to speak their mind, but I believe they should be encouraged to do so.

Honest, open, constructively critical commentary and dialogue are the precursors to greater transparency and accountability. Greater transparency and accountability are the cornerstones to a stronger market, a stronger economy, and ultimately a stronger nation.

Perhaps somebody from FINRA would care to comment and issue a response. In fact, I challenge FINRA to issue a public statement addressing the concerns people have about retribution. I further challenge FINRA to host quarterly public forums with extensive Q/A.   

Until then, here’s to a stronger America….

Sense on Cents/FINRA

…and please be constructively critical of me and my writing here. I am all for making this site better while we’re at it.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.






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