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Posts Tagged ‘Jonathan Cuneo’s lawsuits against FINRA’

Amerivet Wins Round in Amerivet v. FINRA

Posted by Larry Doyle on March 5th, 2011 10:01 AM |

Jack Dempsey vs. Luis Angel Firpo - Sept. 14, 1923 Did the Wall Street regulator FINRA have funds from its own internal investment portfolio invested directly or indirectly in Bernie Madoff’s Ponzi scheme? Did FINRA effectively front run the auction-rate securities market in 2007 when it liquidated a position of approximately $647 million ARS from that same internal portfolio?

Do you think investors and all Americans would like to know the answers and details to these questions and much more? Do you think we deserve to know these answers? You think?

After developments this week, we are that much closer to learning answers to these questions and potentially much more about Wall Street’s regulator FINRA. How so? Let’s navigate.

The donnybrook legal battle continues between Amerivet Securities of Moreno Valley, California and the Wall Street self-regulatory organization FINRA. For those keeping score, the latest round this week was a decided victory for Amerivet. Why do I believe this specific case and the allegations made by Amerivet are so important?   (more…)

FROM THE ARCHIVES: Attorney Claims Wall Street’s Cop, FINRA, Invested in Madoff

Posted by Larry Doyle on January 29th, 2010 8:31 AM |


The policies implemented in Washington are trying to buy time in hopes that our economy recovers. Japan took the ‘buying time’ approach and twenty years later they are still waiting for real recovery.

Moving forward.

The approach being taken by those within our financial regulatory structure (SEC and FINRA) is to ‘move forward.’ Well, unless the critically unanswered questions and issues embedded within these organizations are fully exposed and addressed, America can never truly move forward with confidence in the markets and those overseeing them.

President Obama wants real financial regulatory reform. Then Mister President, compel your chair of the SEC, Mary Schapiro, to open the books and records of FINRA. Mr. President, compel Ms. Schapiro to unseal documents regarding the very formation of FINRA itself.

America knows something still smells on Wall Street. What is it? (more…)

Lawsuits Trying for Transparency at FINRA

Posted by Larry Doyle on September 21st, 2009 2:55 PM |

Will the American public receive real transparency from the financial regulatory community? We will learn a lot more over the next 6 weeks.

Bloomberg News has filed a Freedom of Information request compelling the Federal Reserve to release information on loans it made to a wide array of banks. The Fed is currently appealing a judge’s order requiring the release of this information. The judge is expected to rule on the Fed’s appeal by month end. Sense on Cents will be monitoring this situation closely.

A second situation which has received less public notice but is no less important revolves around two lawsuits filed by a Washington D. C. law firm, Cuneo, Gilbert and LaDuca against FINRA (Financial Industry Regulatory Authority). High five to BA for bringing this story to my attention. The Corporate Crime Reporter highlighted these suits the other day and writes:

They say sunlight is the best disinfectant.

If so, then Jonathan Cuneo is on a campaign to disinfect FINRA.

Cuneo and his law firm – Cuneo Gilbert & LaDuca – have three lawsuits pending against the Financial Industry Regulatory Authority (FINRA).

In each, FINRA is being represented by F. Joseph Warin of Gibson Dunn & Crutcher.

“FINRA is the largest private regulator for all securities firms doing business in the United States, yet it is run like a secret society,” Cuneo told Corporate Crime Reporter. “The organization claims to promote transparency in the financial industry, while simultaneously fighting a battle to hide very basic information from its members and the public. Our lawsuits challenge this secrecy and aim to bring accountability to this organization.”

Two of the lawsuits – Benchmark Financial Services v. FINRA and Standard Investment v. FINRA – allege that FINRA member firms are due more than the $35,000 they received as part of the 2007 merger between National Association of Securities Dealers (NASD) and the regulatory arm of the New York Stock Exchange – a merger that resulted in the creation of FINRA.

At the time of the merger negotiations, NASD told its members that because it was a non-profit, the most it could pay each firm was $35,000.

But in March 2007, the Internal Revenue Service (IRS) issued a private letter ruling which indicated that in fact NASD could pay a lot more than $35,000.

How much more is a secret.

Earlier this month, the Second Circuit Court of Appeals ruled that amount of money the IRS said NASD could pay each firm was confidential.

The NASD told its members at the time of the merger negotiations that the source of the $35,000 “was projected future savings resulting from anticipated efficiencies of the consolidated entity.”

“This was false,” the Benchmark lawsuit declares. “The true source of the funds was an over $1 billion fund that constituted a portion of NASD’s member’s equity, a pool of cash that had been amassed largely as a result of the development and sale of the NASDAQ stock trading system.”

“The misrepresentation was designed to deceive members into believing that they should accept the amount offered lest they upset the NASD’s projections of future efficiencies and cause difficulties for the consolidated entity going forward. Defendants knew that if they told members the truth – that they would be paid $35,000 each (or a total of $175 million) out of their own equity fund of more than $1 billion – they risked a wide-open evaluation demand scenario that would have delayed, invited more scrutiny concerning – and potentially even threatened – the whole transaction.”

The Benchmark lawsuit alleges that one motivation for the merger was to secure higher executive compensation for officers.

Mary Schapiro is currently the chair of the Securities and Exchange Commission (SEC).

Before leaving to the SEC, Schapiro was CEO of NASD, then FINRA.

In 2006, before the merger, Schapiro’s compensation was $1.9 million.

In 2007, as head of the newly created FINRA, her compensation jumped to $3 million.

“The amounts of total executive compensation are eye-popping by any measure, but are especially staggering for a non-profit institution,” the lawsuit alleges. (more…)

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