July 11, 2013
Okay, so FINRA barred a welfare cheat. On the other hand, since when is stealing $7,000 worth of food stamps and child care financial assistance the grist for the self regulatory mill? More to the point, when will we see equal determination against the big boys and not just the small fry?
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Phaedra Danell Spain a/k/a Phaedra Danell Bushnell MS a/k/a Phaedra Danell Bushnell submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Phaedra Danell Spain a/k/a Phaedra Danell Bushnell MS; a/k/a Phaedra Danell Bushnell, Respondent (AWC 2012033517901, June 28, 2013).
Phaedra Danell Spain entered the securities industry in 2002 and has been associated with Banc One Securities Corporation (June 2002 to July 2005) and Chase Investment Services Corp. (July 2005 - July 2012). The AWC asserts that she had no prior disciplinary history.
Food Stamps And Child Care
The AWC alleges that while associated with Chase Investment Services Corp from April 2011 through May 2012, Spain falsified a co-worker's payroll statements and submitted them to the State of Louisiana's Department of Children and Family Services ("DCFS"), and thereby fraudulently obtained some $7,000 worth of food stamp and child care financial assistance from DCFS
FINRA Polices The Biz
FINRA deemed Spain's fraud to constitute a violation of FINRA Rule 2010; and in accordance with the terms of the AWC, the self regulatory organization imposed a Bar from association with any FINRA member in all capacities.
Bill Singer's Comment
I want to make it perfectly clear before I launch into a jeremiad that I have virtually no sympathy for Respondent Spain, do not under any circumstances approve of her defrauding of DCFS, and fully appreciate why her conduct might well merit her being barred by FINRA.
Okay - is that clear enough for you all?
On the other hand, this AWC is a pious, sanctimonious, hypocritical pile of warm steaming crap.
Now - is that also clear enough for you all?
Let's take a look at the FINRA Rule on which Spain was skewered:
FINRA Rule 2010. Standards of Commercial Honor and Principles of Trade
A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.
Ah yes, Wall Street's "high standards of commercial honor," and the equally sacrosanct "just and equitable principles of trade."
So - what do we have in the Spain AWC? You have an individual registered person doctoring financials in order to defraud DCFS (and, by extension, the taxpayers of Louisiana). This $7,000 crime of the century brings down the high dudgeon of FINRA upon this one woman's head.
Is FINRA Rule 2010 applied with equal fervor among the small fry and the big fish? Yeah, right.
What about all the big shot CEOs, Board Chairs, CFOs, and the other captains of Wall Street who poured more sludge into the cesspool of bogus mortgages, poorly concocted collateralized obligations, and inflated financial disclosures? You know, those financial shenanigans and hi-jinks for which no one was criminally prosecuted. Those under-the-table, over-the-top, up-yours creative bits of bookkeeping for which state and federal prosecutors have exacted hundreds of millions in settlements (without anyone actually admitting or denying the allegations, thank you).
For too long, FINRA's approach to so-called self regulation has impressed me as some velvet roped entrance to an exclusive club where the shlubs, the unfashionable, the uglies can't get in. On the other hand, the celebrities, the hot shots, the well-connected are on the list and get to party inside.
It's nice that FINRA goes after the welfare cheats. But you're not exactly going after the C-Suite set with their high-priced lawyers. I just wish that the self regulator displayed equal fervor when it comes to the high-and-mighty's T&E accounts, charge cards, office redecoration expenses, Super Bowl junkets, holiday parties, and the subsequently restated quarterly/annual reports.
It's wrong to rip off taxpayers. As such, I have no sympathy for Spain; however, it's also wrong to rip off the shareholders of public companies and the investing public.
High standards of commercial honor. Just and equitable principles of trade. Honor. Equity. Fine words. Imagine a Wall Street where such concepts were fairly and consistently enforced upon the Bernie Madoffs and the Phaedra Spains of the biz.
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