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Posts Tagged ‘who is Finra’

U.S. Chamber of Commerce Hits FINRA Hard

Posted by Larry Doyle on July 20th, 2011 8:49 AM |

Would your blood start to boil if you felt a hand in your back pocket going for your wallet? Damn right it would.

Then your blood should also boil when the topic of financial regulatory reform comes up. Why?

For the very simple reason that the quality of our financial regulations has an enormous impact on that hand reaching for your wallet.

Do you have confidence that either the crowds on Wall Street or in Washington will truly and effectively protect you from that hand? Not much, right? Me neither. Who will? (more…)

Tags: consumer and investor protections, debate over financial regulations, Dodd-Frank Act implementation, Dodd-Frank financial regulatory reform, Elton Johnson of Amerivet Securities, financial regulatory reform, FINRA Accountability and transparency, future financial regulations, hand going for wallet, Institutional Shareholder Services, investor education, ISS, Larry Doyle, POGO, quantity vs quality of financial regulation, Sense on Cents, structure of financial regulations, The SIPA, U.S> Capital Markets Competitiveness: The Unfinished Agenda, U.S. Chamber of Commerce report on financial regulation, US Chamber of Commerce, Wall Street regulation, who is Finra, who protects consumers, who protects investors
Posted in FINRA, General, regulation | 2 Comments »

How Did FINRA Know the ARS Market Was Failing Well Before 2007?

Posted by Larry Doyle on December 1st, 2010 10:24 PM |

If you knew a market were starting to fail, would you step in and purchase that asset?

If that market were failing, but simultaneously being propped up by underwriters, do you believe regulators should protect you?

If that market were failing and a regulator charged with protecting you actually dumped some of those failing assets from its own portfolio, how would you feel?

If you owned some of these securities, do you think you might be protected by the regulator? The government?

Let’s reenter the world of auction rate securities and continue to bang the drum for those investors in America who have been so badly mistreated by the financial industry, the regulators charged with protecting them, and our government.

Although I have written voluminously on the auction-rate securities market, I was never fully aware of when auctions started to fail. Until now. (more…)

Tags: ARPS, ARS scandal, Bear Stearns, Citigroup, David Kotz, Erin Gallipeau, failure of auction rate securities market, FINRA, FINRA's liquidation of Auction Rate Securities, Goldman Sachs, JP Morgan, Linda Chatman Thomsen, material misstatements and omissions, Reuters, SEC, SEC case 3-12310, SEC Cease and Desist Order, SEC's OCIE, Section 17(a)(2) of the Securities Act of 1933, Securities Act of 1933, Securities and Exchange Commission, State of Colorado vs E*Trade, The Failure of the Auction rate Securities market, Wall Street self-regulator, who is Finra, who oversees FINRA
Posted in ARPS, ARS, Auction Rate Securities scandal, FINRA, General | 14 Comments »

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…)

Tags: Amerivet proxy Proposals, financial sro, finra 2010 annual meeting, finra transparency and disclosure, Investment News, John Busacca, Larry Doyle, Sense on Cents, sipa, SRO, The SIPA, Wall Street regulation, Wall Street sro, what does Finra do?, who are the FINRA board of governors, who is Charles Bowsher, who is Dr. Shirley Ann Jackson, who is Ellyn L. Brown, who is Finra, who is Gary H. Stern, who is Harvey J. Goldschmid, who is James D. Weddle, who is James E. Burton, who is Jed Bandes, who is Joel Blumenschein, who is Joel Seligman, who is John F. X. Dolan, who is John J. Brennan, who is John W. Schmidlin, who is Ken Norensberg, who is Kurt P. Stocker, who is Mark S. Casady, who is Richard F. Brueckner, who is Richard G. Ketchum, who is Richard S. Pechter, who is Seth H. Waugh, who is W. Dennis Ferguson, who is William H. Heyman
Posted in FINRA, General | 8 Comments »

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…)

Tags: Amerivet, Elton Johnson, financial regulatory reform, FINRA Annual meeting 8-12-10, FINRA Bernie Madoff, FINRA Board of Directors, Finra investment portfolio, FINRA proxy, Joe Giannone of reuters, Jonathan Cuneo, Mary Schapiro, nancy Condon, Richard Ketchum, what does Finra do?, what is FINRA's role, who is Elton Johnson, who is Finra
Posted in General | 6 Comments »

Wall Street’s Greatest Fraud

Posted by Larry Doyle on July 20th, 2009 9:07 AM |

Bernie Madoff’s Ponzi scheme has to be the greatest fraud of all time, right? Allen Stanford is likely a distant second, correct?

Well, actually, no. Madoff has certainly reserved a special place in financial ‘hell’ for his fraud, but make no mistake, the single greatest fraud ever perpetrated on investors is the collective Wall Street enterprise that marketed and distributed Auction-Rate Securities. The ARS market at its peak was a $330 BILLION market. Of that initial size, those on Wall Street tracking developments within the ARS market project that $165 BILLION held by thousands of retail and institutional investors remain frozen.

The Wall Street Journal highlights the next in what could be a long running series of ARS investigations in writing this morning, Cuomo Says Schwab Faces Fraud Suit:

In an official notice sent to Charles Schwab & Co. Friday, Attorney General Andrew Cuomo warned that his office plans to sue the largest online brokerage firm for civil fraud over its marketing and sales of auction-rate securities to clients. Emails and testimony cited in the letter show Schwab’s brokers had little idea of what they were selling and later failed to tell clients that the market was collapsing.

I am heartened to see AG Cuomo launch this action against Schwab but I wonder why he does not simultaneously take the same action against EVERY bank, broker, and investment management firm involved in the marketing and distribution of ARS.

Regular readers of Sense on Cents know that I believe the ARS trail leads back to the Wall Street self-regulatory organization, FINRA. For the benefit of our newer readers, allow me to reconnect the dots once again. (more…)

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…)

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Posted in Auction Rate Securities scandal, FINRA, General | 3 Comments »

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…)

Tags: are Wall Street arbitrators disinterested, are Wall street arbitrators unbiased, deck stacked against investors, disputes with my broker, how are Wall Street disputes settled, how does Finra fund itself, how does Wall Street arbitration work, investors must sign arbitration agreement, is Wall Street arbitration fair, issues with my broker, problems with my broker, Public Investors Arbitration Bar Association, rules changes proposed by PIABA, Securities Arbitration Is Faulted, SIFMA and PIABA, Wall Street arbitration, Wall Street arbitration process, what is Finra, who is Finra, who sits on Wall street arbitration panels
Posted in General, Wall Street | 1 Comment »