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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 »

John Lounsbury: “A Very Low Opinion of FINRA”

Posted by Larry Doyle on January 24th, 2011 7:00 AM |

“Who will protect me?”

How many investors in our nation continue to ask that question?

A lot!!

Throughout the crisis of the past few years and certainly well beyond that, investors have come to appreciate that they really need to learn to protect themselves. Why is that? We have rampant evidence that neither Wall Street nor the financial regulators overseeing Wall Street have truly protected investors. So now what? (more…)

Tags: a low opinion of finra, Dodd Frank Wall Street reform and Consumer Protection Act, Dodd-Frank, fiduciary vs suitability, Financial Advisor, Financial Industry Regulatory Authority, financial planning, financial regulators, financial regulatory system, formation of FINRA, Global Economic Intersection, Investment Advisors Act of 1940, investor protection, John Lounsbury, Kathleen Casey and Troy Paredes, Larry Doyle, No Quarter Radio, oversight of registered investment advisers, oversight of RIAs, questions for FINRA, SEC vs FINRA, self regulatory oversight for Wall Street, Sense on Cents, Wall Street oversight, Wall Street regulation, what is an RIA, what is an SRO, who protects investors, who will regulate RIAs
Posted in FINRA, General | 1 Comment »

Wall Street Has a Problem as High Frequency Trading Moves to Washington

Posted by Larry Doyle on July 27th, 2009 11:25 AM |

When a hot financial topic hits Main Street and there are political points to be scored or lost in the process, little wonder it quickly moves on to Washington. I speak of the increasing attention and focus on high frequency program trading.

The serious ethical, if not legal, concerns surrounding high frequency trading hit Main Street this past Friday with a lead article in the New York Times. I highlighted that article along with my extensive writings on this topic here at Sense on Cents in my piece “Wall Street Has a Problem as High Frequency Trading Moves to Main Street.”

Well, we awaken this morning to see the high frequency trading issue making waves in Washington. The Wall Street Journal reports In a Flash, Schumer Warns SEC:

Sen. Charles Schumer (D., N.Y.) told the Securities and Exchange Commission that he will move to limit “flash” orders for stocks if the agency takes no action against them.

The practice routes stock trades through private liquidity pools before being sent onto other exchanges for filling. Critics contend that flash ordering creates a two-tiered system of investors, where those with access get a better price than those without.

“If the SEC fails to curb this practice, I plan to introduce legislation in the U.S. Senate to prohibit the use of flash orders in connection with optional pre-routing programs in order to ensure that trading in U.S. public capital markets is fair and transparent for all market participants,” Sen. Schumer wrote Friday.

While on one hand I commend Schumer for being proactive on this front, I am reminded that he has been one of the largest beneficiaries of campaign contributions and lobbying dollars from the banks and hedge funds engaged in high frequency program trading. Without questioning Schumer’s motivations, is he taking action to curry public favor against his being linked so closely with Wall Street?

Additionally, the fact that Schumer or any other political representative needs to address this issue again brings into question the efficacy of the regulatory bodies charged with protecting investor interests. How can any observer of high frequency program trading believe the investor playing field is anywhere close to being level?

Why has the field sloped? Very simply, as the various stock exchanges compete for business, the officials running the exchanges have traded investor protection and interests for the volume and revenues provided by high frequency program trading.

Who should have been engaged with these exchanges to prevent these abusive trading programs? The SEC and FINRA. Who actually exposed the issues surrounding high frequency program trading? Financial blogs and Joe Saluzzi of Themis Trading. I commend Mr. Saluzzi given his position in the marketplace.

I am excited to apprise our readers and listeners that I will have Mr. Saluzzi as my guest this Sunday evening August 2nd from 8-9pm on my internet radio show, NoQuarter Radio’s Sense on Cents with Larry Doyle.

Perhaps our elected representatives in Washington along with financial regulators at the SEC and FINRA may care to listen and learn.

Related Commentary

Is Uncle Sam Manipulating the Markets?; July 1, 2009

Is Uncle Sam Manipulating the Markets? Part II; July 6, 2009

Is Uncle Sam Manipulating the Markets? Part III; July 8, 2009

Why High Frequency Program Trading Smells; July 14, 2009

High Frequency Trading: Point-Counterpoint; July 17, 2009

High Frequency Trading Debate: Mano a Mano; July 24, 2009