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FINRA BrokerCheck: Protecting Who?

Posted by Larry Doyle on October 28, 2013 7:42 AM |

FINRA’s mandate is to protect investors.

How do the executives running FINRA reconcile that mandate with the fact that problematic issues raised by Senator Ed Markey (D-MA) back in the mid-1990s continue to be outstanding today? In a recent letter sent by Markey to FINRA CEO Richard Ketchum, the Senator from Massachusetts writes,

I was alarmed to learn that arbitration awards and settlements do not show up in FINRA’s BrokerCheck database because brokers have been able to successfully expunge the information.

Investors cannot protect themselves from dishonest brokers if they cannot determine whether brokers with whom they are considering investing their funds have large or repeated settlements or awards due to their wrongdoing or mismanagement.

Second, I am appalled that $51 million in arbitration awards granted to investors in 2011 remain unpaid.Investors are required to participate in FINRA’s arbitration program if they have a claim against their broker. If an investor successfully proves their claim but is never paid, the integrity of the entire system is threatened.

Finally, I question FINRA’s record in tracking rogue brokers if, as reported earlier this month, over 5,000 stockbrokers from firms expelled by FINRA are still selling securities, a practice commonly known as “cockroaching.”

Markey goes on and informs Ketchum that after having read and reviewed recent stories brought to light by The Wall Street Journal,

. . . I learned that many of the same problems I had identified and believed had been corrected by the industry in the early 1990s continue to plague the securities industry.

As was then, is now, and without meaningful change in the self-regulatory system on Wall Street, will likely forever shall be.

For those who would like to read and review all of Markey’s 4-page letter to Ketchum, I welcome sharing it.




Those watching closely are well aware of the serious issues raised by Markey for the welfare of the general public. Markey’s points beg the question as to who FINRA is really protecting.

Navigate accordingly.

I thank the many readers who brought this to my attention.

Larry Doyle

Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.

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I have no 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.


  • Andrew

    FINRA exists to extort money from the system, and for no other purpose.

  • Andrew

    Really no different than your earlier post about “Obamacare”. Create a list of rules to which you cannot comply, and then punish you for noncompliance.

    • Peter Scannell

      Or create a list of rules to comply with, and allow those who ignore the rules to go on their defiantly noncompliant way.

  • Forever, and ever…Amen. It’s coming up on an election year…

  • Small BD

    “Protecting Who?” Is precisely the question to ask. Very recently member firms received FINRA’s newly compiled, 44 page “Report on Conflicts of Interest.” It was apparently designed to alert firms to different scenarios and to suggest modification of supervisory control procedures (which already incorporate billions of regs that are regularly ignored). Oddly, the extreme conflict of vacillating between industry and regulatory positions does not appear amongst the examples of conflicts.

  • Susan

    What behooves me is that it is so easy for the pot to call the kettle black. I know there is much room for improvement in our industry, but has the Senator looked in the mirror? Our poor country is going down the drain. What has he got to say about that? Why is Congress in such shambles? How can he put our house together when he can’t fix his?

    • LD

      Your point is a good one. Akin to a cat fight among illicit bedmates, no?

  • Bill

    DC Mafia in action.

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