What kind of fuckery is this?
You made me miss the Slick Rick gig (oh Slick Rick)
You thought I didn’t love you when I did (when I did)
Can’t believe you played me out like that (Ahhh)

-Amy Winehouse,  Me & Mr Jones


I have throughout my career in finance, studiously avoided having much to do with FINRA, WallStreet’s woefully corrupt self-regulatory entity.

I never got into trouble when I was on the Sell Side (i.e., series 7 licensed individual), so I never experienced their crony-flavored version of justice. But I was very much aware of their role in screwing investors — out of their legal rights to a trial (via mandatory arbitration) and thus out of their monies. If you want a primer on this, check out William Cohan’s series on FINRA arbitrations. It is astounding.

The latest nonsense from this wholly self serving cesspool of corruption is detailed by Susan Antilla, in Dealbook’s A Rise in Requests From Brokers to Wipe the Slate Clean. It turns out that bad brokers can have their records of misdeeds, if not expunged, well then cleaned up quite a bit. Try doing that with a felony or even misdemeanor if you are not a juvenile.

I cannot begin to express my disdain for this organization, which serves the interests of wirehouses and not investors. Indeed, I believe they have done immeasurable damage to individual investors over the decades — through their kangeroo (non)courts, and by the way the “Self” regulate, an inherent contradiction in terms if ever there was one.

Don’t take my word for it. Read Cohan’s series, and do some digging into their formation and background. Just don’t have a large meal first . . .




A Rise in Requests From Brokers to Wipe the Slate Clean
NYT, June 10, 2013  

See also:
Wall Street Justice System Is a Kangaroo Court
William D. Cohan
Bloomberg, January 12, 2012

Wall Street’s Captive Arbitrators Strike Again
William D. Cohan
Bloomberg, July 8, 2012  

Time to shut down Finra’s arbitration panels
William D. Cohan
Investment News, July 30, 2012

Category: Legal, Really, really bad calls, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “The Latest Fuckery from FINRA”

  1. susiek says:

    My partner’s family experienced FINRA arbitration last year. They only got about half of what the broker bilked them of and I attribute them getting that much because they were able to hire a lawyer who used to be on the other side of the table. Of course, BrokerCheck doesn’t even have their settlement in there.
    I’d love to see the arbitration system fixed. It seems the way it’s designed creates a conflict of interest. The arbitrators’ regular customers are the brokers and firms and who are they going to pick to be on the panel? The ones that are tough on them? I don’t think so.

  2. flocktard says:

    FINRA is LONG overdue for scrutiny- and dismantling. It has been an abject failure, and instead of protecting the public, by their own action, they have ruined the very industry they were charge with keeping straight.

    I keep my own file on FINRA enforcement. Here is an example of what FINRA calls “Market Integrity”

    Willful Failure to Disclose Criminal History on Form U4
    FINRA settled a matter involving a registered person who willfully failed to disclose his criminal history on a Form U4. The registered person submitted a Form U4 to FINRA in June 2008. In response to a question that asked whether he had ever been charged with a felony, he falsely answered “no,” even though he had been charged with the criminal felony of first-degree burglary two years prior. The registered person also falsely answered “no” to the questions of whether he had ever been convicted or pled guilty to a misdemeanor involving the wrongful taking of property and whether he had ever been charged with a misdemeanor. In 2001, he had been charged with the misdemeanor offense of property theft by check, to which he pled guilty.

    FINRA found that the registered person’s failures to disclose were willful and violated NASD Rule 2110* (ethical standards), NASD Membership and Registration Rule IM-1000-1‡ (filing misleading information as to registration), and Article V, Section 2(c) of the FINRA By-Laws (application for registration). As such, FINRA fined the registered person $5,000 and suspended him in all capacities for six months. Additionally, because the
    registered person’s failures to disclose were willful and involved material information, he is subject to statutory disqualification.

    In other words, instead of outright BANNING a convicted burglar and a bad check passer from the industry, FINRA took it’s pound of flesh- the better to keep it’s executive staff in custom made suits- and let’s this creep pay them $5000 to get admission to the industry again.

    What did FINRA think this creep is going to amount to if he ever gets hired again?

    I keep others on file, including one specimen who was convicted of statuatory rape and sharing porn with minors. However, since HE DISCLOSED, he was deemed to be in compliance and allowed to continue working. Needless to say, the arbitration trail that followed this guy was a sight to behold.

    I am currently FINRA registered, which is why I have to use this preposterous screen name, because I am not permitted to use social media without my “supervisor” approving every utterance, and having him red pencil it. My “supervisor” is 20 years my junior and doesn’t have half my experience. I will probably switch to RIA status by summer’s end. But it’s not because I think being an RIA makes anyone more honest, despite the oft-stated conceit of those practioners. There ARE good brokers out there, and I like to think I’m of them.

    But I reduced to serving FINRA first, before my clients, and that is good enough a reason to make the switch.

    FINRA is just the NCAA. The NCAA maintains the fiction it is supporting the “student athlete” who for all intents and purposes is an unpaid professional who can get disqualified if his mother sells a basketball jersey with her son’s name on it. FINRA maintains the fiction it is “protecting investors.”

    I don’t think anyone needs any ethics lessons from these people.

  3. dukeoferl says:

    Please leave your crude language out of your posts. Thank you.

  4. 873450 says:

    “I cannot begin to express my disdain for this organization, which serves the interests of wirehouses and not investors. Indeed, I believe they have done immeasurable damage to individual investors over the decades — through their kangeroo (non)courts”

    The “fix” is in at kangaroo (real)courts too.

    Elizabeth Warren Warns of Corporate Capture of U.S. Courts