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What Wall Street Secrets Will FCIC Reveal?

Posted by Larry Doyle on September 2, 2010 10:06 AM |

Information is everything.

There is no doubt that the development of the internet and a wide array of websites has led to a significant increase in the amount and quality of information accessed and processed by many. That said, there is also no doubt that there is an equally aggressive, if not public, effort to protect information, privileged or otherwise. Industry and company specific trade secrets can often be the key to developing and maintaining a hard earned competitive edge in the marketplace. I fully support and appreciate those ‘secrets.’ On the other side of this coin, though, there are ‘secrets’ which can often be the key to unlocking bad practices, if not much worse.

On this note, after a day’s worth of travel yesterday, I was particularly intrigued to read the Financial Times’ Probe Chief to Issue Wall Street Data. A few comments. Why is it that the FT’s electronic delivery entitles this article as such, while the hard copy entitled it, Probe Chief to Issue ‘Secret’ Wall Street Data? That one little word, ‘secret,’ is exceptionally powerful. What is Wall Street hiding? Why are they hiding it? Who specifically is hiding it? Do the secrets entail illicit and fraudulent activities? So many questions.

Sense on Cents has been asking these questions of Wall Street in general and our financial regulators specifically for a long time. Let’s navigate further into the Financial Times’ article:

Wall Street groups face the disclosure of internal documents that could provide a treasure trove for would-be litigants and a headache for banks, regulators and their lawyers.

Phil Angelides, Financial Crisis Inquiry Commission chairman, said he planned to publish a large amount of background data when he delivered the commission’s final report in December to allow further scrutiny by academics and journalists. “It’s not just banks, I might say that there are a lot of government agencies that want to keep all their documents secret and my view is if they add to the knowledge of the crisis I lean towards disclosure,” he said.

Hey now!!! That’s what I’m talking about.

Finally, somebody in a position to provide some real transparency and disclosures has woken up and smelled the coffee. Which government agencies? The SEC, perhaps? How about its sidekick, Wall Street’s self-regulator, the Financial Industry Regulatory Authority, FINRA? Sense on Cents has been asking FINRA specifically to open its books and records for a year and a half.

Don’t tease us, Phil. Deliver the goods!!!

The commission – set up by Congress to study the crisis and given sweeping legal authority – has used subpoena powers to compel Goldman Sachs to release documents and to force Warren Buffett, the chairman of Berkshire Hathaway, to testify.

But it is in a race against time to obtain additional information from Wall Street and complete its work before its deadline. “Sometimes it’s fair to say we’re getting the ‘slow walk’. They’re probably looking at December 15 and saying ‘we’ve got 100 days to go until these guys are gone’,” said Mr Angelides.

‘Slow walk?’ If that is the case, you have the power of the subpoena, then go ahead and use it. America deserves answers. Your mandate is to provide them.

When the Financial Crisis Inquiry Commission was launched, Mr. Angelides’ right hand man, Bill Thomas, publicly solicited information and provided his e-mail address. I took him up on it and sent the following:
Fri, Jan 29, 2010 8:22 pm


I would like to submit to you the following links which encompass a number of allegations of serious improprieties at FINRA. Would welcome speaking with you or anybody on the commission about this material.

America deserves to have these issues addressed.
Attorney Claims Wall Street’s Cop, FINRA, Invested in Madoff

and this as well
How Big Was Mary Schapiro’s Lie

Larry Doyle

I fully appreciate the points I raise are very serious. Regular readers of Sense on Cents are aware that I ask the hard questions for the very simple reason that I strongly believe greater transparency and disclosures will help restore badly needed investor confidence and investor protection. The core of these questions are also embodied in proxy proposals recently passed by an overwhelming margin of FINRA’s member firms.

Don’t tease us Phil!! Deliver the goods!! America deserves answers and real transparency. Your legacy is on the line here.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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