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Posts Tagged ‘what does Finra do?’

Jim Himes Co-Sponsors Legislation to Stop Congressional Insider Trading

Posted by Larry Doyle on November 21st, 2011 5:10 PM |

A week ago, I wrote Sense on Cents Calls Out Congress to Pass H. R. 1148 Outlawing Congressional Insider Trading.

In the midst of writing my commentary, I highlighted that:

I called my Congressman Jim Himes (D-CT) this afternoon and informed his spokesman of my initiative here at Sense on Cents. I let him know that Jim’s name will be published at Sense on Cents as supporting this legislation or not.

I got his spokesman’s attention and let him know how great the blogosphere was at spreading this type of information. He fully understood.  (more…)

Who Are the FINRA Board of Governors?

Posted by Larry Doyle on August 22nd, 2010 10:23 AM |

While the general financial media would seem not to understand nor care that Wall Street to a large extent is a self-regulated industry, many within the industry and around the country very much care. The Financial Industry Regulatory Authority (FINRA) is the financial industry’s self-regulatory organization.

At FINRA’s 2010 Annual Meeting held a week ago, FINRA’s member firms overwhelmingly voted for seven aggressive non-binding proxy proposals. These proposals were by and large targeted at bringing greater transparency and disclosure to FINRA’s operations. Will FINRA’s board of governors acquiesce and fully address these proposals? (more…)

What Will We Learn from FINRA’s Annual Meeting on 8-12-10?

Posted by Larry Doyle on August 11th, 2010 12:20 PM |

Wall Street’s self-regulatory organization, FINRA, holds its annual meeting tomorrow inWashington D.C.. What will we learn? Will FINRA’s member firms vote for a number of non-binding proposals which would shine real light on the inner workings of this organization? America deserves to learn so much more than has ever been revealed about FINRA.

I have shared with many people that I believe the underlying tone of our markets would improve if FINRA were compelled to open its books and records. Why do I so strongly believe that? True transparency inherently breeds investor confidence. I made this very point to Joe Giannone of Reuters just the other day. Regular readers of Sense on Cents are fully aware of my feelings. Joe highlights the topics surrounding FINRA for a wider audience as he writes, FINRA Faces Calls to Lift Veil on Finances, Pay:

Wall Street regulator FINRA, which demands disclosure and openness from brokers, is under pressure to lift the veil on its own affairs.

The Financial Industry Regulatory Authority, a private corporation that regulates the nation’s 4,700 brokerages, will learns at its annual meeting on Thursday how many support a dissident’s call for more transparency. (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…)

Obama and SEC Should Check FINRA’s Dirty Laundry

Posted by Larry Doyle on July 10th, 2009 4:50 PM |

Quiet, clean, effective organizations don’t need major advertising campaigns. Their professionalism and demeanor speak volumes.

Why does FINRA feel it needs to now advertise aggressively? As any individual knows, the best form of advertisement is word of mouth. If FINRA, and its parent organizations, had performed over the years, they would not now be in the position of having to spend a dime on advertisements.

Against that backdrop, President Obama is throwing around some heavy artillery on the financial regulatory front. I feel strongly that we do not merely need some new weapons, but much more so new generals and a new financial regulatory structure overall.

Bloomberg highlights, Obama Seeks Power for SEC to Prohibit Wall Street Pay Practices:

The Treasury Department today sent Congress legislation that would let the SEC ban “sales practices, conflicts of interest and compensation schemes” deemed harmful to investors. The measure authorizes the agency to remove individuals who violate rules from all aspects of the industry, rather than just a specific segment such as selling securities or managing money.

Who is charged with protecting investors? FINRA.  If FINRA had been performing, would new legislation even be necessary? No way. Rather than new legislation, how about we have a new regulatory body that is not funded by Wall Street firms. Dissolve FINRA and restructure it.

Bloomberg continues:

President Barack Obama’s SEC proposal is part of the overhaul of financial regulations in response to the worst economic crisis since the Great Depression. Lawmakers have vilified securities firms for selling investors unsuitable products and basing pay on how many transactions bankers execute without regard to whether deals succeed in the long term.

Unsuitable products? None more unsuitable and fraudulently distributed than our favorite, that being Auction-Rate Securities.  Last we checked there are still thousands of investors with approximately $165 BILLION ARS frozen.  Dissolve FINRA and restructure the regulatory oversight of Wall Street.  Expose all the firms involved in the ARS fraud, including FINRA itself!!

Bloomberg addresses another hot topic:

The plan targets mandatory arbitration agreements, granting the SEC power to prohibit them in contracts consumers sign with brokers, investment advisers and those who sell municipal bonds. Mandatory arbitration bars customers from suing financial professionals in court.

Who is charged with overseeing arbitration? You guessed it…FINRA. If  all these problems exist within the space FINRA is charged with overseeing, perhaps the problem is as much the overseer as those overseen. Sense on Cents feels strongly that without implementing a dramatic structural change of FINRA, we will largely run in place.

Bloomberg finishes by reporting:

The measure gives the SEC authority to reward whistle blowers who give the agency tips about those violating all securities laws. The SEC currently has power to pay individuals who provide the agency with tips on insider-trading violations.

Retroactively, the SEC should find some manner for rewarding Harry Markopolos for displaying the guts and integrity in pursuing the Madoff scam.

In regard to the ARS scam, perhaps the SEC could send a strong signal to ARS investors by compelling FINRA to release all the details on the sale of its $647 million ARS position in Spring 2007.  If the powers that be at the SEC are unaware of FINRA’s liquidation of ARS, just ask their boss Mary Schapiro, who came from FINRA.

For what it is worth, the SEC still has not responded to my communication with them addressing all these topics.

While Barack, Turbo-Tim, and team want to arm the SEC and in turn FINRA with new tools to cleanse the system, they may want to start by checking  the dirty laundry within FINRA itself.


Finra Talking Tough on Fraud, but ‘Talk Is Cheap’

Posted by Larry Doyle on June 24th, 2009 2:01 PM |

We can’t live in the past. It is not healthy to overly dwell on the past. Life is about the landscape in front of us. That said, unless we address, expose, and expunge the errors and omissions of the past, can we truly achieve the full potential of our future?

Our recent financial past has been filled with pitfalls and frauds. Wall Street’s self-regulator Finra is fully cognizant of investor concerns on this front. Finra recently launched a marketing campaign to address investor concerns. From Finra’s own website, Finra Launches Enhanced Investor Protection and Education Programs:

“Informing and educating investors is an essential component of our investor protection mission,” said FINRA Chairman and CEO Richard G. Ketchum. “The recent market turmoil makes it more important than ever that investors be aware of FINRA and the tools and resources that we provide to help them plan their financial futures, protect their interests and make informed investment decisions.”

The video, “Tricks of the Trade: Outsmarting Investment Fraud,” is a 60-minute broadcast-quality presentation on preventing investment fraud. Using profiles of victims and perpetrators, the video highlights the persuasion tactics that con artists use to defraud their victims and the basic tools investors need to defend against fraud. A trailer of the video is available at; the full video will be released in July, but can be pre-ordered. “Tricks of the Trade: Outsmarting Investment Fraud” will also be distributed in public libraries throughout the country and shown at movie premieres in selected states.

Any legitimate initiatives to counteract fraudulent activities should be embraced. I welcome this initiative by Finra and hope it proves overwhelmingly successful. The Wall Street Journal expanded on this Finra initiative in writing, New Finra Ad Campaign Talks Tough On Fraud:

Do you think your broker a total fraudster? Afraid your retirement is in jeopardy?

Then meet Finra.

That still relatively unknown acronym stands for the Financial Industry Regulatory Authority, the self-funded watchdog for the brokerage industry. And in its new national advertising campaign, Finra is seeking to restore investor confidence by talking tough against the brokers that don’t “play by the rules.”

“If brokers don’t play by the rules, we can fine them, suspend them – even put them out of business,” a male voice says in one ad, which displays black and white images of ordinary Americans against the backdrop of solemn guitar music. “We believe the markets don’t work unless they work for everyone.”

Pretty tough talk!! We need some tough regulators in order to root out fraudulent activity. We also need regulators who will pursue total transparency and integrity at every turn. Will Finra carry this torch? If so, it will have to address its own reputation in the process. The WSJ offers more: (more…)

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