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Posts Tagged ‘NASDAQ’

Financial Times Highlights Great American Joe Saluzzi

Posted by Larry Doyle on May 26th, 2010 12:31 PM |

Confidence in the markets and the economy is ultimately a function of truth, transparency, and integrity.

The reason global investors have such little confidence currently is due to the very simple fact that both the financial industry and their government counterparts have not promoted practices which embrace these cherished principles.

That is not to say that each and every individual in the financial industry or in government does not try to promote these values. In fact, I believe the overwhelming majority of people on Wall Street and in the global markets do embrace these values, but they are not in a position to speak out when the principles are violated. I love it when I come across people who possess the courage and are unencumbered to speak out for the truth, transparency, and integrity our markets, our country, and our world so badly need. Like who? (more…)

No Quarter Radio’s Sense on Cents Welcomes Back Joe Saluzzi

Posted by Larry Doyle on May 22nd, 2010 10:00 AM |

UPDATE: This episode of NQR’s Sense on Cents with Larry Doyle has concluded. You can listen to a recording of the episode in its entirety by clicking the play button on the audio player provided below. Once the audio begins, you can advance or rewind to any portion of the episode by clicking at any point along the play bar.


What really happened in the markets on Thursday May 6th? Can regulators truly address the underlying issues that caused the ‘flash crash’ or are our equity exchanges fundamentally and structurally broken?

How can you protect yourself in the face of such unbelievable volatility? Who benefits and who loses in the face of this volatility?

Will circuit breakers proposed by regulators work? Will we witness more days like May 6th?

If you have any interest in our markets and our economy, you will not want to miss my show this Sunday evening from 8-9pm ET as No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes Back Joe Saluzzi. >>>> (more…)

Joe Saluzzi Exposes ‘Theft on Wall Street’

Posted by Larry Doyle on May 14th, 2010 9:17 AM |

Themis Trading’s Joe Saluzzi was designated a Sense on Cents Hall of Fame medalist this past January. Mr. Saluzzi has once again distinguished himself by providing a significant degree of transparency into the technical structures of our seriously flawed equity exchanges.

A recently released white paper, Exchanges and Data Feeds: Data Theft on Wall Street,written by Joe and his colleague Sal Arnuk at Themis Trading is getting a LOT of attention on Wall Street and in Washington. I welcome highlighting and bringing this 3-page paper to Main Street. If you have any interest in the markets and our economy, this paper is a MUST read. Allow me to whet your appetite: (more…)

May 6, 2010 Trading Was Crony Capitalism!!

Posted by Larry Doyle on May 7th, 2010 9:27 AM |

While the market is working to digest the better than expected Unemployment Report this morning, put the pom-poms away please. No, I am not negative on the report, I am calling bulls%*# on a crony capitalist system that allows for so-called market exchanges to develop and function as they did yesterday.

Fat finger (meaning a trade size was incorrectly entered)? I do not buy it. I think yesterday was nothing more than so-called liquidity providers engaging in high frequency trading, and taking investors to the hoop in a HUGE way. How so? (more…)

Is FINRA’s Future in Doubt?

Posted by Larry Doyle on February 23rd, 2010 2:04 PM |

Are the days of Wall Street’s self-regulatory organization known as FINRA numbered?

In the opinion of the very credible Project on Government Oversight, they should be. Why? Significant failures, massive conflicts of interest, and more. POGO’s comprehensive and scathing letter to four separate House and Senate committees touches upon every failing within FINRA, with the exception of the integrity of the proxy statement used in the formation of the organization itself. Strong allegations in a current lawsuit against FINRA make the case that Mary Schapiro lied verbally during roadshows and in the proxy statement. (For details on this lawsuit read here.)

Despite not addressing the issues embedded in that lawsuit, POGO touches all the other bases and covers all the other issues surrounding this organization. (more…)

My Letter to Judge Jed Rakoff in re: Benchmark and Standard Investment Chartered v. FINRA

Posted by Larry Doyle on October 15th, 2009 8:38 AM |

On October 6th, I attended a public hearing relating to complaints filed by Benchmark Financial and Standard Investment Chartered v FINRA (Financial Industry Regulatory Authority). This hearing was held in the United States Courthouse in New York City. The core of these complaints is the distribution that FINRA (NASD) made to its member firms from proceeds generated from the IPO (initial public offerring) of the Nasdaq Stock Exchange.

A major topic at hand in this case is the release of unredacted documents from FINRA. What are unredacted documents? Documents in which certain key segments are not edited or withheld.

These complaints were recently reassigned to Judge Jed Rakoff. He has received significant attention given his ruling in a case involving the SEC and Bank of America. Judge Rakoff commented that the business periodical Barrons had expressed an interest in the Benchmark and Standard Investment Chartered case versus FINRA. The point being that Barrons represents a public interest.

I sent a letter to Judge Rakoff yesterday requesting the release of unredacted documents from FINRA. I share my letter with you, the readers of Sense on Cents, in the spirit of full disclosure and because I believe strongly that our financial regulators must provide full transparency. I view that issue to be the core of this case and thus of significant public interest.


October 14, 2009

Honorable Jed S. Rakoff
United States Courthouse
500 Pearl Street
New York, NY, 10007

Re: Benchmark and Standard Investment Chartered v. FINRA

Dear Judge Rakoff,

Please allow me to introduce myself. I am currently a financial commentator. I operate my own website, Sense on Cents. The mission of my work and site is to help people ‘navigate the economic landscape.’ In light of the economic crisis and turmoil in our financial markets, I launched my site earlier this year in order to share my insights and experience with the public at large. What is my experience?

I am a Wall Street veteran of 23 years. I traded and sold a wide array of mortgage-backed securities. I worked at First Boston, Bear Stearns, UBS, Bank of America, and culminated my career in 2006 as the National Sales Manager for Securitized Products at JP Morgan. Having witnessed the decay in confidence in our financial system at large and our banks, brokers, and regulators specifically, I am hugely inspired to write and help people better understand the nature of our markets and economy. I certainly have not suffered from a lack of writing material.

I do not write for my former colleagues on Wall Street. My targeted audience is that cross–section of our country who wants to receive an unbiased and honest view of the markets and economy. My work has been extremely well received. In a relatively short time frame, I have thousands of people accessing my site. I take real pride in my work.

I am writing to you currently given my interest and that of many of my readers in the transparency or lack thereof in the financial industry overall. A keen area of interest for me and many readers is the lack of transparency specifically in the regulatory oversight of Wall Street. While working on Wall Street, I did not fully appreciate this lack of transparency. For the last eight months I have gained a real appreciation for it.

I have extensively studied the annual reports of FINRA and its parent organization, the NASD. I was flabbergasted to learn that this self-regulator is truly a large financial entity unto itself. In reviewing its finances, I have raised serious questions about potential conflicts of interests and questionable investment activities. At almost every turn, FINRA has largely rebuffed calls for real transparency. The public deserves to have a fully transparent regulator overseeing Wall Street.

Against this backdrop and having attended the hearing in your chambers on October 6th on the above referenced case (I was the only member of the public or the press in attendance), I would request that you release unredacted documents pertaining to these complaints. The release of those unredacted documents would be of real public service. That service entails the ongoing public cry for real transparency in our financial industry at this time. That cry for so many of our citizens seems to go unheeded all too often. I could share dozens of comments left at my site echoing that cry.

I truly believe if a real measure of confidence in our markets and our economy is to return, it must be based on true transparency and integrity. While I have written extensively on the lack of transparency and integrity in our country, I don’t pretend to think that my site will change the landscape on this front immediately. That said, I am never discouraged to continue digging deeper, writing more, and asking the hard questions. On this front, I sincerely hope the adjudication of this case will highlight these qualities for all to see.

I thank you for allowing me to share my feelings. I recall your having referenced Barrons back on the 6th. Sense on Cents is not Barrons, but for the thousands who have shared their passionate feelings with me on this topic, I am obliged to serve their interest as well as those who have yet to find my site.

With all due respect.

Larry Doyle
Sense on Cents

P.S. If you care to sample some of my recent work, I respectfully submit:
>> Is Wall Street On the Up and Up? (October 3, 2009)
>> Is the Wall Street Cop, FINRA, Ready To Talk? (September 22, 2009)

Mary Schapiro Has Some ‘Splainin To Do…

Posted by Larry Doyle on October 8th, 2009 4:03 PM |

Mary Schapiro

Big money makes for a very strange bedfellow. Is FINRA sleeping well these days? A pending lawsuit against FINRA would like to pull back the covers and check to see if the money in the FINRA mattress was allocated appropriately. Let’s enter the sitting room and take a peek into this corner of the FINRA household.

In the process of consolidating the NASD with NYSE Regulation to form FINRA, the NASD allocated capital proceeds to its member firms. This capital was generated via the initial public offering of the Nasdaq. Did the NASD, now known as FINRA, significantly underallocate capital proceeds to its member firms? This alleged underallocation, known as being ‘picked off’ on Wall Street, is the basis for a lawsuit brought by two FINRA member firms, Benchmark and Standard Investment Chartered.

Why am I concerned about the arcane inner workings and legal issues of a Wall Street self-regulatory organization? For the very same reason that I’m concerned about that regulator’s internal investment portfolio activities. Transparency or the lack thereof and the resulting confidence or lack thereof that the American public has in our entire financial regulatory system. Those goals strike me as worthy especially in light of the systemic risks embedded in an array of organizations which this regulator was charged to oversee. Yes, a large amount of exposure and transparency is badly needed at this point in our economic history. Against this backdrop, let’s navigate and see what we can learn about this lawsuit.

The law firms of Cuneo, Gilbert & LaDuca along with Greenfield and Goodman are representing the plaintiffs. From the former’s website we learn:

Along with our co-counsel Greenfield & Goodman, LLC, we currently represent members of the Financial Industry Regulatory Authority (“FINRA”) (formerly known as the National Association of Securities Dealers or “NASD”) in United States District Court and Court of Appeals litigation.  The complaints, which are based on state law, allege that defendants, among other things, obtained the NASD members’ vote in support of the consolidation of NASD and NYSE Regulation through an inaccurate and deceptive proxy statement and solicitation process. (LD’s highlight) At issue in the suit is whether NASD could have distributed to its members a larger share of the approximately $1.5 billion of NASD members’ equity.  As members will recall, NASD repeatedly asserted that the IRS imposed a $35,000 “hard cap” on what the NASD could pay its members.

Wow. With a $1.5 billion pie, we are talking big money. In light of that, a charge labeled as ‘inaccurate and deceptive proxy statement and solicitation process’ is aggressive especially for an industry’s regulatory organization. Whatever happened to embracing accuracy and clarity? Let’s continue.

Some documents from the litigation that shed light on the truth of these statements are now public.  However, FINRA has insisted that the key fact – the amount the Internal Revenue Service (“IRS”) told NASD it could distribute – remain secret, that is, under seal.

Secret? Under seal? Those terms aren’t synonymous with transparent. I thought under the ‘change’ being promoted by the Obama administration transparency would be embraced. What this looks like is more ‘business as usual’ on Wall Street. Navigating further we learn,

>The IRS did not limit the payment to member firms to $35,000 as NASD and its officials insisted.

>The IRS did not issue a formal ruling on the payment to members until March 13, 2007 – approximately two months after the member vote on the bylaws occurred.November 21, 2006.

>NASD Board Minutes demonstrate that the NASD Board discussed the $35,000 limit stating, “regardless of the amount agreed upon, it was paramount that the figure not be subject to negotiation.”

At this juncture, if I could be so bold as to steal a line from Ricky Ricardo in engaging Lucy, I would say to Mary Schapiro who headed FINRA, “you got some ‘splainin to do.”

For any legal beagles and overachievers in the audience, I am happy to submit the following legal documents pertaining to this case:

Communications between NASD and the IRS

NASD Board Materials

Proxy Materials

Internal NASD Emails

Internal NASD Memoranda

Communications Between NASD and NYSE

Rest assured, I will be monitoring developments in this case closely.


February 2009 Market Review

Posted by Larry Doyle on February 28th, 2009 10:13 AM |

monthly-market-review1Prior to going to the comments section of my son’s report card, human nature dictates that I first look at the grades. In that same vein, let’s see how the markets performed for the month of February:


Let’s review my specific projections from the January 2009 Recap: (more…)

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