July 25, 2020
There is often only step separating the sublime from the ridiculous, but FINRA seems to have built an entire staircase upon which to test that truth. And FINRA regularly treads those steps. Up and down. Down and up. All the while the self-regulatory-organization gets nowhere but fast. In yet the most recent installment of the heights and depths of FINRA's sublime ridiculousness, consider this recent study about Arkansas inmates and their financial status and literacy.
Veteran industry lawyer Aegis Frumento is happy to debate the extent to which FINRA Rule 2010 is honored more in the breach than in the observance. As Aegis sees it, the rule is selectively enforced, often for the benefit of the large firms that are FINRA's moneyed constituency and against the interests of small firms and individual registered representatives. Where is FINRA-the-regulator when it comes to policing its large firms' common practice of besmirching the reputations of their ex-brokers by marking up their CRD records as they show them the door?
FINRA Rule 3240 prohibits a registered person from borrowing money from any customer of that registered person unless certain conditions are met. In a recent settlement, FINRA found that a registered person had violated its rule when she arranged for a loan for her son from one of her customers. FINRA thinks that its Borrowing Rule applies to those facts. Veteran industry regulatory lawyer Bill Singer isn't so sure.
Prominent radio talk-show host Hugh Hewitt announced his support for the re-election of FINRA Small Firm Governor Stephen Kohn.
Last year, our publisher Bill Singer, Esq. could not have been clearer in expressing his anger with what he called a garbage of a FINRA Arbitration Decision. Taking things a step farther, Bill hoped that a reviewing court would sanction FINRA for failing to provide a sufficient record of the arbitrators' rationale. Bill may not get his entire wish but the Court sure as hell didn't pull its punches when it said that its "does not currently have a viable method to conduct even a limited review of the merits of the decision."