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Posts Tagged ‘what is Finra’

“The Lack of Transparency and Accountability at FINRA Is Absurd”

Posted by Larry Doyle on December 10th, 2010 6:46 AM |

I detest those people and organizations paying mere lip service to issues needing real transparency and accountability.

I love having the voice provided by Sense on Cents so I can highlight a wide array of these issues and so people can more effectively navigate the economic landscape. I also love being able to ask the hard questions and call out those whom I think are not serving the public interest.

What else do I love? I love when a voice far stronger than my own echoes my thoughts, shares my opinion, and blasts away in pursuit of real truth, transparency, and integrity along our economic landscape.

With only a few exceptions, the media as a whole has shown itself unwilling to truly take the gloves off and go after the aforementioned ‘lip serving’ individuals and institutions. Independent watchdogs in pursuit of good government are far more aggressive.

On this note and against this backdrop, I have to admit my adrenaline picked up yesterday. How so? Let’s navigate as I was informed of the following: (more…)

Sense on Cents Calls for Independent Investigation of FINRA

Posted by Larry Doyle on March 27th, 2010 4:51 PM |

PLEASE READ and ENDORSE THIS CALL for an INDEPENDENT INVESTIGATION. PLEASE SHARE. Thanks!! LD

I have publicly stated time and again that I believe the Wall Street self-regulatory organization, FINRA, did sit and likely still sits at the nexus of the Wall Street-Washington incest that has brought our nation’s economy to its knees.

Regrettably, we have had no Congressional inquiries into the failures at FINRA. Dare I say, we have had no public pressure from the media to drive a Congressional inquiry.

I am tremendously sickened by Congress not working for America’s citizens interests by investigating FINRA. Please recall that FINRA not only failed to protect investors, but there are strong allegations that FINRA itself participated in some of the greatest frauds on Wall Street via its own internal investment portfolio. Which frauds?

We know they dumped $647 million auction-rate securities in mid-2007 and likely front ran the ARS market while doing it. I unearthed the fact that FINRA owned these ARS in January 2009 when reading FINRA’s 2007 Annual Report. Meanwhile, $150 BILLION held by thousands of investors remains in frozen ARS investments.

There is an outstanding allegation that FINRA invested its own funds in Bernie Madoff. We know they failed to properly regulate and monitor Lehman, Bear Stears, and Merrill Lynch. How much more should Congress need to know?

FINRA needs to be introduced to the American public and investigated by Congress. FINRA has not even received direct focus or attention in Senator Dodd’s proposed Financial Regulatory Reform.

We can sit idly by and allow Wall Street and Congress to dictate to us or we can do something. I choose the latter. I want this post and this site to be the lightning rod to bring attention to how Wall Street’s self-regulation, embodied in FINRA, drove our economy into the ditch.

Please add your support by leaving a comment endorsing this investigation. I intend to keep a focus on this topic until FINRA’s failures are fully exposed and people are held to account. Get your friends and colleagues to do the same. If we can create a groundswell of support, I feel confident I can get some selected media friends to pick this up. From there, I welcome leading this march to Washington.

The American public and American investors deserve nothing else.

Any questions. Please do not hesitate to ask here or write me at senseoncents@aol.com.

Who’s with me?

FINRA must be independently investigated. America needs to learn how the Wall Street cop was not only asleep, but also in bed with the financial industry as Wall Street brought America to the brink of disaster.

LD

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 www.saveandinvest.org/tricksofthetrade; 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…)

Wall Street Arbitration or ‘Puttin in the Fix’?

Posted by Larry Doyle on June 23rd, 2009 11:07 AM |

How would you like to bring a case in which the counterparty is not only defendant, but judge and jury as well? Probably not, right?

Welcome to the world of Wall Street arbitration.

Investors, when opening an account with a bank or broker, are compelled to sign an agreement stating that any dispute will be adjudicated via an arbitration process. On its surface, arbitration is not a bad process. It is utilized in many industries. That said, for arbitration to be uniformly fair the arbitrators must be disinterested parties. Does that happen on Wall Street? Come on, be serious!! The deck is stacked against investors in arbitration. Why?

Arbitrators obviously need to have a thorough knowledge of the financial industry in order to pass judgment. Beyond that, though, Wall Street arbitrators and arbitration have lots of issues and embedded conflicts.

Let’s take a harder look at the arbitration process. The Wall Street Journal provides a brief overview, Securities Arbitration Is Faulted:

Attorneys who represent investors have asked the Securities and Exchange Commission to drop a requirement that a securities-industry representative sit on arbitration panels.

Yes, that statement right there highlights the embedded conflict in the arbitration process. Let me simplify. Say, for example, an investor brings a complaint against his Morgan Stanley broker. On the arbitration board will sit a representative from Goldman Sachs. Simultaneously, right down the hall an investor brings a complaint against his Goldman Sachs broker. On the arbitration board sits a representative from Morgan Stanley.  Level playing field? Come on.

Investors who open a brokerage account generally sign away their rights to sue the broker or the firm for bad advice. They have to settle disputes through arbitration run by the Financial Industry Regulatory Authority, which is funded by the industry.

What do we learn here? The case obviously will not be arbitrated in your lawyer’s office and similarly not in the offices of the broker’s attorney. Who holds court? The Financial Industry Regulatory Authority, FINRA, which is funded by Wall Street. Conflict of interest? At least on the surface it would appear as such. For those unfamiliar with FINRA, this is the organization which has yet to issue their 2008 Annual Report and dumped $647 million in Auction Rate Securities either shortly before or as the ARS market was failing. Feeling confident yet? Me neither. (more…)






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