Who Said Mary's FINRA Is Fast Asleep?

Breaking, just in time to take the heat off FINRA chief executive office Mary Schapiro when she shows up in front of the Senate banking committee Thursday, for confirmation as chairman of the US Securities and Exchange Commission.

FINRA settled a matter that involved a registered representative who misappropriated $50 from a customer. The customer had earned a $50 credit by referring two new customers to the representative’s employer bank. The representative obtained the $50 from the bank but never deposited the funds into the customer’s account. Instead, the representative kept the money for himself.

FINRA concluded that this conduct violated NASD Rule 2110 (ethical standards) and, as a result, barred the representative in all capacities.

Which should make all those embarrassing questions about, among other things

1. FINRA’s alleged supervision of Bernard L. Madoff Investment Securities LLC;
2. Her finagling of the NASD-NYSE Regulation merger (during which she caught a 50 per cent pay raise, to more than $3 million);
3. Some mysteriously good things that happened to people (Gary Lynch, lookin atcha!) with whom she had worked during her term as a SEC commissioner;
4. Her longstanding refusal to change the inherently biased mandatory arbitration system; and
5. And just how somebody who has been a senior member of the regulatory complex for 20 years could so quickly throw off a severe case of Stockholm Syndrome.

quietly go away.

Tug o’ the forelock: Paul Springer

Obama's Pick to Head SEC Has Record of Being a Regulator With a Light Touch

by Randall Smith, Tom McGinty And Kara Scannell

The Wall Street Journal Jan. 15 2009

Schapiro to face Senate grilling over SEC nomination

by Joanna Chung, Deborah Brewster and Greg Farrell

The Financial Times Jan. 14 2009

SEC Choice Is Sued Over a Merger of Regulators

by Stephen Labaton

The New York Times Jan. 12 2008

Will This Change Mean Anything?

by Gary Weiss

Gary-Weiss.com Jul. 25 2008

Earlier on NakedShorts:

If Mary Schapiro’s the answer...

...it was probably a stupid question

Dec. 18 2008

Comments

[kotika98:]

I'm glad FINRA is finally getting some attention. This organization is not a regulator but a broker-dealer lobbying group, formerly known as NASD. It had always been but a shill, always taking the position hostile to investors. in my time, most significant battle had been decimalization - it dragged on for several years, until finally SEC ordered them to get the act together and move to decimalization despite their protests that it would be "bad" for the markets. (see here: sec.gov/divisions/mark...

I am sure other people will bring up instances of NASD doing everything possible to help its paymasters at the expense of the general public.

Also relevant to current events - a brokers customers are eligible to protection up to 500K from SIPC as soon as the broker becomes member of the FINRA. Can anyone enlighten us, what is exactly the authority of FINRA over its members, i mean in normal times when not investigating/arbitrat... complaints etc?

Jan 15 10:47 AM