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FINRA Should Crack Down on Management

Posted by Larry Doyle on January 3, 2014 7:53 AM |

The lead article in this morning’s Wall Street Journal is entitled FINRA To Crack Down on Brokers with High Numbers of Complaints. This should be a good thing, right? Yes, it should.

The question still begs, though, why FINRA has been so amenable to expunging such an overwhelming percentage of complaints against brokers. Recall that just a few weeks back, I highlighted the fact that FINRA had expunged 96.9% of complaints lodged against brokers from mid-2009 through the end of 2011.

How might individuals know if a broker soliciting them is unscrupulous if a large number of complaints have been erased? Talk about a massive pardoning and significant do-over! But what is an even bigger problem in the industry than brokers with questionable business ethics?

In the opinion of a longstanding and very highly regarded industry insider, the far bigger issue resides within Wall Street management. This individual recently shared the following highly incriminating statement with me:

The reason I think management needs to be held accountable is …
I’ve seen more brokers effectively fired for being ethical than fired for being unethical.
Read that again. Think about what that simple sentence means for the client and the industry. It sounds like hyperbole, unfortunately it is not.

That is an exceptionally strong statement. I would welcome hearing from others inside the industry as to what they think of that statement specifically and FINRA in general.

Navigate accordingly.

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.

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