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The 4 Reasons Wall Street Cannot Be Trusted

Posted by Larry Doyle on June 20, 2012 6:47 AM |

What are some of the great failures and subsequent lessons America has learned about Wall Street since the outset of our economic crisis 5 years ago?

Well, we have witnessed more failures and learned more lessons than I have space here to highlight. The failures and lessons actually go back a lot further than this crisis.

Regrettably, the industry titans running Wall Street and their crony capitalist partners lining their pockets in Washington have shown little to no inclination to address what Sense on Cents believes are the greatest failures and lessons.

Dodd-Frank? Nope, that doesn’t do it. Consumer Financial Protection Bureau, perhaps? Nope, not there either. See, the fix is still in on Wall Street and far too many in America are not aware of the regulatory sting being perpetrated on investors each and every day. 

What is the essence of this sting and why is it that America neither trusts Wall Street nor Washington? It is called self-regulation and in regard to Wall Street, it is called FINRA (Financial Industry Regulatory Authority), Wall Street’s SRO (self-regulatory organization).

Let’s get very specific. What are the 4 reasons embedded within the organization known as FINRA that precludes America from trusting Wall Street? Why should you be concerned even more today about these shortcomings? For the very simple reason that FINRA, supported by their crony capitalist bedmates in Washington, are looking to increase their regulatory footprint.

Take the mere 90 seconds to view this clip from the Project on Government Oversight and you will understand why I have railed so long and so hard on this Wall Street SRO.

Are you dumbfounded? How is it that an industry funded, self-regulatory organization is not required to comply publicly with the following:

1. Freedom of Information Act
2. Open books and open meetings
3. Cost-benefit analysis for rules and regulations
4. Ethics Rules designed to address conflicts of interest

Many in Washington are now pushing to have FINRA oversee the investment advisory industry. I STRONGLY believe this would be a horrendous development. FINRA and Wall Street have failed egregiously to protect investors. Washington now wants to reward this organization by having them oversee investment advisors. What is wrong with that picture? A lot.

Let’s start the conversation on FINRA by having them comply with the 4 points highlighted above. Then, and only then, might America start to regain a measure of trust in our financial system.

I strongly encourage you to contact your Congressman and compel him/her to reject the Investment Advisory Oversight Act (H.R. 4624). Use this link to reach your representative.

As always, be very careful, and . . . navigate accordingly.

Given the importance of this topic, I would ask you to share this commentary with your friends and colleagues via social media or any other means. Thanks.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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