Time For FINRA To Get Its Own House In Order

June 16, 2013

On June 11, 2013, Dan Jamieson of InvestmentNews appears to have broken the story that the Financial Industry Regulatory Authority's ("FINRA's") District 7 Regional Director Mitch Atkins had resigned. READ: "Finra's Florida regional director resigns / Atkins had oversight for Florida, Atlanta, New Orleans."  Atkins had been with FINRA and its predecessor NASD since 1993, and in 2005 became the first director of FINRA's Boca Raton Office. Jamieson reported, in part:

"Mitch resigned to pursue other interests," confirmed Finra spokeswoman Nancy Condon in an email.

Reached by phone, Ms. Condon declined further comment.

On June 14, 2013, Reuters' Emily Flitter blew the lid off of this developing story when she revealed that:

[A]tkins pleaded guilty in December 1993 to one charge of charitable bingo fraud, according to a copy of court records reviewed by Reuters.

Court records reviewed by Reuters state that Atkins was sentenced in January 1994 to a year of probation, 100 hours of community service and $1,000 in fines for the bingo fraud. . .

READ:"FINRA director in U.S. resigns after old theft indictment surfaces" (Reuters by Emily Flitter).

In an update to his article, Dan Jamieson offered more context:

[M]r. Atkins was indicted on a felony and a misdemeanor charge in March 1993. The felony charge was dismissed in late 1993 when Mr. Atkins pleaded guilty to the misdemeanor charge.

He was sentenced in early 1994 to conditional probation, 100 hours of community service, a $500 charitable contribution, and a $500 fine. The misdemeanor charge against him was set aside and the court record supposedly expunged in March 1994 after Mr. Atkins had complied with the terms of his sentence. . .

SIDE BAR: It is my understanding that there is another developing aspect to the Atkins story, but given that what has been conveyed to me is largely based on rumor and innuendo, I will leave it for the press to fully and fairly investigate the bona fides of that story rather than comment on it at this time.

Bill Singer's Comment

For too long there has been a puzzling double standard by which those in regulated industries are forced to disclose their backgrounds but those who regulate those same industries are exempted from similar disclosure.  As an advocate for regulatory disclosure by registered persons, I have similarly called for a "what's good for the goose is good for the gander" approach that would mandate the same open record for those at the Securities and Exchange Commission, FINRA, and the full spectrum of federal, state, and self-regulatory regulation.  

As I stated in "The Death Of The Salesman" (August 8, 2009)  (NOTE: An "FSP" is a Financial Service Professional; Ed: highlighting added):

Unified Disclosure Database

Similarly, the public should be entitled to easy access to a single unified database for all FSPs . Additionally, the information provided should not depend upon whether you contact one regulator or another. We need to create a centralized, public database that is easily accessible via the Internet and has a user-friendly interface backed up by a supportive customer service staff.

As a lawyer, I personally welcome uniformity among all professional databases, including those in my profession, in the medical profession and in the financial services community. What's good and fair for one should be the same for all. Further, whatever disclosure is mandated for those in these regulated professions should also be mandated for those who do the regulating-and I would also urge the inclusion of all elected officials at local, state and federal levels. What's good for the goose is good for the gander. Sunshine is good for all living things.