FINRA is conducting a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation. The protection of senior investors is a top priority for FINRA. As such, FINRA is interested in whether additional tools, guidance or changes to FINRA rules or administrative processes are appropriate to further address suspected financial exploitation and other circumstances of financial vulnerability for senior investors.This Notice outlines the general retrospective rule review process, summarizes the rules and administrative processes that most directly apply to financial exploitation of senior investors, and seeks responses to a number of questions related to addressing financial exploitation. . .
In conducting the review of rules relating to financial exploitation of senior investors, FINRA staff will follow a similar process to that of previous retrospective rule reviews. In general, the review process consists of an assessment and an action phase. During the assessment phase, FINRA will:
Upon completion of this assessment, FINRA staff will consider appropriate next steps, which may include some or all of the following: modifications to the rules, updated or additional guidance, administrative changes or technology improvements, additional tools, educational materials or other resources, or additional research or information gathering.The action phase will then follow. To the extent action involves modification of rules, FINRA will separately engage in its usual rulemaking process to propose amendments to the rules based on the findings. This process will include input from FINRA's advisory committees and an opportunity for comment on specific proposed revisions in a Regulatory Notice or rule filing with the Securities and Exchange Commission (SEC), or both.
Hmmmm . . . maybe FINRA the self-regulatory-organization could just send a few of its 3,600 employees to the SEC's roundtable and they could take notes, and, sure, have a couple of cups of coffee and a cinnamon bun or two.[F]ederal prosecutors and regulators are rolling up the fraudsters and making great headway in the war against elder fraud -- which is as it should be. We need more cops on the Wall Street beat. Unfortunately, in this summer's installment of regulatory bull-shit, we have the SEC rolling out a Task Force, which will host a Roundtable. SEC Retail Strategy Task Force to Host Roundtable on Combating Elder Investor Fraud (SEC Release) https://www.sec.gov/news/press-release/2019-134. A Task Force hosting a Roundtable. It's hard not to laugh at such idiocy. It's hard not to conclude that this is all about giving the appearance of effort rather than striving for accomplishment. . . .Why actually do something about elder investor fraud when you can serve danish, bagels, and coffee at a roundtable? I'm guessing that many veteran SEC examiners, investigators, and lawyers have suggestions as to how the federal regulator could effectively combat elder fraud, but, let's not get carried away here -- those folks aren't political appointees, and, as such, who the hell cares what they have to say. Moreover, let's not forget all the studies, white papers, and panels that have yielded all sorts of disregarded advice over the years.Which brings us to 2019, when the SEC thinks that the best use of its funds and time is to haul out a Task Force, which will host a Roundtable. This roundtable's ambitious goal is to "explore views" about how to "identify and combat elder investor fraud."Are you shittin' me?For starters, the best way to combat elder investor fraud would be to cut the waste of time and expense inherent in having a task force host a roundtable. . .
The Senior Investor Protection Conference is a one-day event dedicated to sharing the most up-to-date regulatory information, effective strategies and solutions for protecting senior investors and vulnerable adults. This conference includes an expanded focus on FINRA Rules 2165 and 4512-which provide firms with tools to help protect seniors and vulnerable investors from financial exploitation. The conference also offers opportunities to network and discuss issues specific to senior investors with FINRA staff and industry practitioners.
A room block is available at the Hilton Washington DC National Mall hotel for registered attendees. The special room rate of $255 per night, plus tax, is available until October 18, 2019, or until the room block is sold out. Hotel reservations will then be accepted on a space- and rate-available basis.
FINRA has a limited number of exhibitor opportunities available for this conference. To secure your participation, contact . . .
7:30 a.m. - 8:30 a.m. Networking Breakfast:
Bill Singer's Snarky Comment: While many seniors will be busy during this morning hour cutting their prescription pill in half, you can hobnob with folks who might want to hire you or sell you something or buy something from you during an hour of fabulous networking and enjoy free coffee and danish (tea available for those who prefer).8:30 a.m. - 8:35 a.m. Welcome and Opening RemarksBill Singer's Snarky Comment: You really need 30 minutes to say Welcome and to reiterate what you've set forth in the written documentation announcing the agenda for the Conference?8:35 a.m. - 9:20 a.m. Keynote Address:Bill Singer's Snarky Comment: What's the point of a Keynote Address? The Conference is about "effective strategies and solutions for protecting senior investors and vulnerable adults." I've spent several hundred bucks and after two hours, I haven't gotten diddly squat.9:20 a.m. - 9:35 a.m. Networking Break:
Bill Singer's Snarky Comment: Are you shittin' me? Networking break? Break from what -- coffee, danish, the networking breakfast, opening remarks, and the keynote address? Why the hell didn't you roll the 9:20 networking break into the 7:30 networking breakfast?9:30 a.m. - 10:30 a.m. Diminished Capacity and Suspected Elder Abuse
As the number of older Americans continues to climb, registered advisors face a critical challenge - how to take care of clients experiencing diminished capacity or financial exploitation. During this session, panelists share helpful tools to address privacy concerns, helpful contractual protections, identification of red flags and steps to take once the red flags are identified.
Bill Singer's Snarky Comment: Two hours into this one-day event, and we're only now first getting to anything of substance.
10:30 a.m. - 10:45 a.m. Networking Break
Bill Singer's Snarky Comment: This is the third networking opportunity since 7:30 a.m. Enough already.
10:45 a.m. - 11:45 a.m. Working With Senior Investors
During this session, FINRA staff and industry panelists discuss the current and upcoming senior population, and provide practical tips for working with an aging decision maker. As marketing and communicating to senior investors is a vital part of many firms' business, panelists will also highlight the importance of ensuring clear and effective communication, and discuss varied oversight practices.
Bill Singer's Snarky Comment: One hour? That's all you're allocating for discussing "practical tips for working with an aging decision maker" and to consider "varied oversight practices?" You do realize that you've already given an 1 hour and 30 minutes of networking but only 60 minutes about how to work with seniors?
11:45 a.m. - 1:00 p.m Networking Lunch and Dessert with Exhibitors
Bill Singer's Snarky Comment: 1 hour and 15 minutes of networking at lunch plus the ever attractive "dessert with exhibitors." Is FINRA planning on donating some money to meal deliveries for the homebound elderly devastated by Wall Street fraud? What are the plans for offering desserts to senior citizens afflicted with diabetes who can't afford their meds?
1:00 p.m. - 2:00 p.m. Suitability and Sales Practices Considerations for Senior Investors
When working with senior clients, it is important for a firm's procedures and controls to properly gauge the suitability of recommendations to senior investors and ensure clear, straightforward sales practices. Join FINRA staff and industry experts as they discuss FINRA's suitability rule, the rule's potential interplay with cognitive decline, and the importance of ensuring senior clients understand product risks.
Bill Singer's Snarky Comment: Anyone want to bet on the over/under for the number of attendees who will be snoring through this session thanks to the sugar-crash from the dessert with exhibitors.
2:00 p.m. - 2:15 p.m. Networking Break
Bill Singer's Snarky Comment: Again with the goddamn networking breaks?
2:15 p.m. - 3:15 p.m. Scams Targeting Older Investors
In recent years, senior investors have increasingly been victims of investor scams. During this session, panelists highlight emerging trends in investor scams used to defraud older investors, provide tips to identify potential "red flags" and discuss who to contact if a fraudulent scheme is suspected.
Bill Singer's Snarky Comment: Nothing like a one-hour filler between two 15 minute networking breaks.
3:15 p.m. - 3:30 p.m. Networking Break
Bill Singer's Snarky Comment: Grrrrrrrrrrrrrrrrrrrr.
3:00 p.m. - 4:30 p.m. Legal and Regulatory Update
Panelists explore the evolving regulatory structure surrounding senior investor protections and the challenges facing regulators and financial services professionals when developing an effective, efficient and integrated protection framework.
Bill Singer's Snarky Comment: The saved the legal and regulatory update for the last panel of the day when, c'mon, let's all admit me, many folks have already left to make their flights home or to have an unscheduled networking break.
4:30 Conference Adjourns
The FINRA Small Firm community is once again up in arms over the ongoing election for the open 2019 Small Firm Member Board of Governors' seat. "UPDATE: 2019 FINRA Contested Small Firm Election: Vote for Linde Murphy" (BrokeAndBroker.com Blog / July 26, 2019). In this latest dust-up, FINRA's National Nominating & Governance Committee nominated sitting Small Firm Governor Robert A. Muh for re-election and, thereafter, transmitted an email on July 25, 2019, urging eligible voters to support their nominee's candidacy despite the existence of Small Firm Member Petition Candidate Linde Murphy. Murphy needed to obtain the requisite 3%-plus petitions in support of her candidacy, whereas Muh, who previously ran for his first term as a petition candidate, avoided that inconvenient qualifying step by accepting the Nominating Committee's nod.
Why does any of this matter?
A Board of 24
The FINRA Board of Governors consists of 24 members:
A Powerful Committee
According to FINRA's website:
NOMINATING & GOVERNANCE COMMITTEE (NOMINATING COMMITTEE)
The Nominating and Governance Committee is responsible for nominating persons for appointment or election to the FINRA Board, as well as nominating persons to fill vacancies in appointed or elected governor seats on the Board. The Committee also nominates Industry and Public members for positions on FINRA's National Adjudicatory Council.
The Committee is responsible for periodically reviewing and recommending changes to standing committee charters and, in consultation with the CEO, nominates the members and chairs of each standing committee of the Board. Also in consultation with the CEO, the Committee develops and recommends to the Board guidelines for effective corporate governance. In addition, the Committee reviews and approves appointments to each of FINRA's advisory committees and changes to the advisory committee enabling resolutions.
As of the close of business on Thursday, May 23, 2019, the number of FINRA large firms was 174, and small firms was 3,261.
Of the 24 Board members, the following seats are appointed by the FINRA Board from candidates recommended by the Nominating Committee: the Public Governors, Floor Member Governor, Independent Dealer/Insurance Affiliate Governor and Investment Company Affiliate Governor (Appointed Governors).The Nominating Committee also may nominate individuals to run for election for the seven elected governor seats that comprise the three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors (Elected Governors). . . .
[O]ur committee is comprised of three industry governors and four public governors. . .
The role of the small firm representatives on the Board, representing over 3,200 such institutions, is a crucial one that demands significant industry experience. . .
The majority of the FINRA board are not from the industry and they have all looked to Bob to get an understanding of the impact of rule proposals on the small firm. . . .
FINRA Nominating Committee NomineeFINRA's Nominating Committee has nominated the following individuals:Large Firm Governor Candidate: Timothy C. Scheve, Janney Montgomery Scott LLCMid-Size Firm Governor Candidate: Brian J. Kovack, Kovack Securities, Inc.Small Firm Governor Candidate: The Nominating Committee determined it would not nominate a candidate for election in 2018. Instead, any eligible candidates who obtain the requisite number of petitions will be included on the ballot.
At the July 2017 meetings, the Nominating Committee nominated and the Board made a number of appointments to the Board that became effective at the Annual Meeting. Governor Kathleen A. Murphy, President of Fidelity Personal Investing, was appointed to succeed Governor John J. Brennan as the Investment Company Affiliate on the Board. . .
NominationsAs you know, my name is on the ballot this year because I went through the petition process to get it there. Let's not forget the efforts of a small group of dissidents that first contested the FINRA nominee years ago. They fought for the rights of small firms and against what they felt was a nominee handpicked by FINRA.At no point in the future would I accept the FINRA nomination for the Small Firm Seat for the Board of Governors. The person who represents small firms at the board level should go to the members and ask for their support by signing a petition.