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Wall Street’s Kangaroo Court: Calling Out FINRA’s Linda Fienberg

Posted by Larry Doyle on May 22, 2014 11:27 AM |

Do you ever hear or read a statement put forth by a public official, industry representative, or regulatory spokesperson and think “Are you kidding me?” . . .  if not something far less polite than that?

I would guess that in a world in which politicians and their spokesmen are not often called on the carpet, many people allow statements worthy of being challenged to go in one ear and out the other if they bother to listen at all.

Today I am not of a mind to be quite so dismissive given the fact that the topic at hand — Wall Street arbitration — not only touches every employee on Wall Street, but also every investor in the nation.

Let’s navigate and continue to play to win for those who care about real transparency and integrity in America.  

I am compelled to address a statement put forth recently by Linda Fienberg, the president of FINRA’s dispute resolution and chief hearing officer. The statement made by Ms. Fienberg deals specifically with the manner in which FINRA records testimony in arbitration hearings. The implications of Fienberg’s statement directly impacts the case of Mark Mensack.

For those unaware, I wrote about this fascinating case in chapter 5 (Kangaroo Court) of my book, In Bed with Wall Street. I highlighted the fact that while Mensack appealed his lost arbitration, the folks at FINRA only provided him with 10 of the 18 hours worth of testimony in the case. Can you imagine that? Think it might be a little challenging to make a legitimate appeal when so much testimony is missing. Many readers of my book have told me of all the egregious injustices, scandalous practices, and corruption revealed in my book, Mensack’s case and the missing testimony take the cake.

Clearly this topic and and the injustice done to Mensack have caught the attention of many folks. Think Advisors’ Jane Wollman Rusoff wrote a fabulous commentary, Brokers Say FINRA Arbitration ‘Rigged’, Like Dealing with The Devil, on Wall Street arbitration just the other day. In the midst of her hard hitting review, Rusoff addresses the Mensack case and includes a retort from Fienberg:

One advisor who tried to appeal is Mark Mensack, now an independent fiduciary consultant and RIA with Piedmont Investment Advisors in Lansdowne, Virginia. But he was unsuccessful in his attempt after losing an arbitration case to Morgan Stanley. It mattered not at all to FINRA that, when he obtained a copy of his recorded hearing proceedings, in preparation of the appeal, eight hours were missing in 14 different places — all material that supported his case.

Fienberg says: “On rare occasions, it has happened that an arbitrator has forgotten to turn on the recording device. But we have a built-in procedure now to almost ensure that cannot happen again.”

Let’s take the gloves off.

Clearly, Fienberg would like to have us believe that the individual operating the recording device in Mensack’s case simply forgot to turn the machine on. If we were to believe that, we would have to accept that the operator “forgot” at 14 separate times . . . for an average duration each and every time of 34 minutes and 18 seconds . . .  AND . . . that these operational memory lapses just so happened to occur in the midst of when the representatives for Morgan Stanley were testifying.

What are the odds of all those crooked curves in the court aligning? I do not think so, Ms. Fienberg.


I am calling Linda Fienberg out. In my strong opinion, a statement as weak and pathetic as that put forth by Ms. Fienberg only further confirms that the FINRA arbitration system is truly a kangaroo court.

Ms. Fienberg, FINRA CEO Rick Ketchum, and all of their FINRA colleagues should think long and hard about the impact that their operational “forgetfulness” had on Mr. Mensack’s professional and personal well being and that of his family.

I might imagine that the folks at FINRA do not appreciate being called out like this, but when they put forth a statement such as that by Ms. Fienberg to explain away such a grievous injustice as that done to Mr. Mensack — and who knows, likely others as well —  then too bad.

Do you think Fienberg et al deserve to be called out?

What’s that?

Did somebody in the back of the room say “bull%#&^”, “blow&*^”, and “banana republic?”

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

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