Sense on Cents

I first wrote about Wall Street’s self-regulatory organization, FINRA (the Financial Industry Regulatory Authority) in January 2009. At that point and ever since I have believed strongly that for a revitalization of the health and confidence of our capital markets, our economy, and ultimately our nation itself that FINRA needed to become a MUCH more transparent organization. Regular readers of Sense on Cents know how passionately I feel.

Regrettably, though, outside of those regularly involved in the financial industry, I believe few people in our nation even know who FINRA is or what they do regulating Wall Street. I strongly believe that reality needs to change. Who would seem to share my belief? Amerivet Securities’ Lieutenant Colonel Elton Johnson, a member of the United States Army Reserve.

I first became aware of Johnson’s battle for transparency within FINRA in August 2009. I was enthused that somebody else cared to discover and expose the inner workings of Wall Street’s SRO.

Given all that our nation has experienced over the last few years, who would not support a call for increased and total transparency for any and all financial regulators? Why is it that the media targets the pathetic performance of the SEC while FINRA gets a free pass? FINRA’s parent, the NASD (National Association of Securities Dealers) had primary oversight responsibilities of Bernie Madoff. FINRA has an internal investment portfolio that liquidated $647 million auction-rate securities mere months before that market segment totally imploded and froze. You think we need real transparency within this organization? Are you kidding me? Is the Pope Catholic?

How has FINRA responded to calls by Johnson and others within the industry for real transparency? Largely with lip service, a cold shoulder, and when need be, a plea of immunity. What? Immunity? Yep, that’s right. FINRA conveniently and effectively utilizes a plea of immunity to obviate the call for transparency by Johnson and others. Is this America? FINRA may report through the SEC, but it is a private organization. Immunity? I call it ARROGANCE! That said, the battle wages on and the pursuit of transparency continues.

Late last week, Amerivet won a key legal victory in its efforts to gain access to certain of FINRA’s books and records. Judge John Mott of the DC Superior Court held that FINRA is not entitled to immunity from Amerivet’s suit seeking access to the organization’s books and records.  Judge Mott also held that Amerivet satisfied its burden under Delaware law and that it may proceed with its case.  Rather than confront the merits of Amerivet’s case, FINRA is now pondering whether to seek an immediate appeal on immunity grounds.  The next hearing is scheduled for March 4, 2011 in Washington, DC.

I implore you to take the few minutes and read Lieutenant Colonel Johnson’s hard hitting recent statement sent to all FINRA member firms (click on image to open a pdf document):

Whom do you support in this case? Would you like to see real transparency within FINRA, or do you believe FINRA should be granted immunity? Please leave a comment either stating “Johnson/Amerivet” or “FINRA”. If you care to expound further, certainly feel free. In the process, let’s send a message to Lieutenant Colonel Johnson and his comrades, our brothers and sisters, as they defend our nation, our freedom, and our liberties. I salute them all.

Almost makes me want to vomit thinking of Johnson serving in Afghanistan while those within FINRA and those also serving on its board make a plea for immunity. That’s America? I don’t think so.

Please comment so Johnson knows how much we support him and his efforts.

Larry Doyle

Sense on Cents Related Commentary:
Sense on Cents/Amerivet

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own and not those of Greenwich Investment Management. 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.

This entry was posted on Friday, February 11th, 2011 at 7:07 AM and is filed under Amerivet Securities, FINRA, General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.