The Wall Street Simulacrum of Regulation (Now Online and in Video Format)

October 14, 2019

The FINRA Investor Education Foundation  (the "FINRA Foundation") offers this brief capsule of its mission "About Us" at

Established in 2003 by the Financial Industry Regulatory Authority, the FINRA Investor Education Foundation empowers underserved Americans with the knowledge, skills and tools to make sound financial decisions throughout life.

The Foundation accomplishes this mission through educational programs and research that help consumers achieve their financial goals and that protect them in a complex and dynamic world.

FINRA, the Financial Industry Regulatory Authority, regulates all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity.

The Global Financial Literacy Excellence Center at the George Washington University School of Business ("GFLEC") offers this brief capsule of its mission at "About GFLEC" at

The Global Financial Literacy Excellence Center (GFLEC) envisions a world in which individuals have the financial knowledge they need to fully participate in the economy and build secure futures. In working toward that vision, GFLEC has positioned itself as the world's leading incubator for financial literacy research, policy, and solutions.

GFLEC launched in 2011 at the George Washington University School of Business in Washington, D.C. Since then, it has pioneered breakthrough tools to measure financial literacy, developed and advised on educational programs, and crafted policy guidelines aimed at advancing financial knowledge in the United States and around the globe.

Not particularly well known about GFLEC is that it has a lovely bunch of so-called "supporters," which you can read about on the "Supporters" page of the Center's website as disclosed at Among GFLEC's wonderful supporters:

  • PwC (better known as PricewaterhouseCoopers, the second largest professional services firm in the world and one of the Big Four auditors)
  • FINRA Investor Education Foundation (how nice! The Foundation "supports" GFLEC and the two of them issue reports)
  • ABA Foundation (the American Bankers Association -- take a gander at this group's list of supporters at
  • MFS Investment Management (Founded in 1924 as Massachusetts Financial Services, a pioneer in the creation of mutual funds)
  • T. Rowe Price (Founded in 1937, this public company offers mutual funds, advisory services, account management, and retirement plans)
  • Charles Schwab Foundation (Founded in 1971, this company offers bank and stock brokerage services)
  • Wells Fargo (Founded in 1952, this company offers banking and financial services, and is recently known for having created over 2 million fake bank accounts).
So . . . what happens when the juggernauts of the FINRA Foundation and GFLEC put their collective talents together? How do these two organizations right the wrongs of Wall Street fraud and protect vulnerable investors?

Alas, it's a tired approach that produces a useless solution. We are presented with nothing more than another in an endless line of reports: "New Research: Many U.S. Investors With Low Financial Literacy Levels Are Ill Equipped to Manage Personal Finances, Especially Investments" (FINRA Press Release / October 10, 2019).

In this latest installment of futility, some Wall Street professionals and academics thought that they needed to research whether human beings with something called "low financial literacy levels" were equipped to manage their personal finances. I mean, seriously? You needed to do research on that? And assuming you thought that was a worthwhile exercise, just what the hell did you expect to do with the results of such research -- simply issue a press release and move on to your next dubious project?

Some things in life seem fairly obvious. For example, objects thrown up into the air are likely to fall back to earth because of the effects of gravity. DuhAll of which makes me wonder how much money is being paid for proof that gravity exists 24/7 on planet Earth -- and what the real, hidden agenda is in financing such research projects. Given that I am an aged cynic, I tend to fear the worst when it comes to human nature and bureaucracies. As such, I am rarely disappointed when my worst fears and suspicions are justified. 

Talking of my ripened, pungent cynicism, please, set aside some time to read today's featured FINRA Press Release. See if you can find anything -- as in ANYTHING -- that surprised you or educated you. Would you have shelled out good, hard cash for such a study? Now that you know that financial illiterates are not well equipped to manage their personal finances, what will you do with that invaluable nugget of insight? And while you're musing about how to apply the dubious lessons of the purported financial literacy report, just what the hell do you think that the FINRA Investor Education Foundation and the Global Financial Literacy Excellence Center are actually going to do in order to educate the financial illiterates among us?

In a fit of pique and a nasty bit of barbed humor, please read my Press Release below. It is inspired by the FINRA Press Release, from which I have lifted many sections and passages but with my own twist. I hope that you will appreciate my warped sense of humor and will quickly concur that I'm smack, dab on point!

"New Research: Many U.S. Regulators With Low Regulatory Literacy Levels Are Ill Equipped to Manage Regulatory Matters, Especially Those Involving Investments" (The Bill Singer International Institute of Financial Regulatory Excellence and Vegan Gelateria Foundation / Press Release / October 14, 2019). 

WALL STREET - Many U.S. regulators with "alarmingly low" levels of regulatory knowledge lack confidence in their ability to meet their regulatory goals, according to new research conducted by The Bill Singer International Institute of Financial Regulatory Excellence and Vegan Gelateria Foundation (the "BSIIOFREAVGF").

"Regulators are seeing a rapid evolution of the regulatory landscape, from the introduction of more complex regulatory products and instruments to a fundamental shift in the retirement system that places responsibility for saving and investing squarely on the shoulders of individual Americans," said Bill Singer, founder of the non-existent  BSIIOFREAVGF. "Fewer regulators today have defined regulatory agendas and the rise of financial fraud requires an understanding of regulatory markets and basic finance that many regulators lack." 

The BSIIOFREAVGF study titled, New Evidence on the Regulatory Knowledge and Characteristics of Regulators, examined many regulators, both living and only-recently deceased, and some who had not died but whose birth was disputed. Regulators were categorized into two segments, workplace-only regulators (those who only sit at a desk in their organization's office and never go into the outside world) and active regulators (those who go into the field but sometimes get stuck in traffic or call in sick to binge watch a popular television series), though the study also included non-regulators for comparison purposes.

Workplace-only regulators had a docket of matters obtained only through their employers, and did not have any other type of matters or any other regulatory investments to investigate in stocks, bonds, mutual funds or other securities. Active regulators had a docket of matters they had obtained by themselves and/or from whistleblowers alerting them to regulatory issues with investments in stocks, bonds, mutual funds or other securities, though most also had matters provided by their employer, as well.

Survey findings show significant differences between workplace-only regulators and active regulators that include:
  • Workplace-only regulators were more likely to include individuals who were divorced or separated, had lower incomes and less education, and were less likely to be self-employed. Women comprised 53% of workplace-only investor group compared to 38% of women among active regulators.
  • Knowledge of basic regulatory concepts across regulators was alarmingly low, but workplace-only regulators knew much less than active regulators. When presented with regulatory literacy questions that measured understanding of the regulation of interest rates, inflation and risk diversification-known as the Big Three rudimentary regulatory concepts-only 32% of workplace-only regulators could answer the questions correctly, compared to 44% of active regulators.
  • Regulators had significant difficulty answering questions connected to two areas of investment decision-making-asset pricing and risk diversification. Asset pricing measures the understanding of the relationship between interest rates and bond prices. Risk diversification measures whether regulators understand that a single company stock is riskier than a stock mutual fund. 
  • Only 25% of workplace-only regulators could correctly answer the asset pricing question, while 35% of active regulators correctly answered this question. Moreover, the same pattern held for the risk diversification question, which was correctly answered by 46% of workplace-only regulators and around 60% of active regulators.
  • The ability to make ends meet, debt, perceptions of regulatory well-being and the ability to withstand regulatory shocks are related to a regulator's decision to invest resources in regulatory markets and to engage in investigations/prosecutions for the long-term. Workplace-only regulators were much more likely (49%) to have difficulties covering regulatory expenses and paying regulatory bills in a typical month compared to around one-third among active regulators (38%). Further, the percentage of regulators who spent more than their regulatory budget in the year prior to the survey was 23% among workplace-only regulators and 18% among active regulators.
  • Regulatory knowledge matters. Higher levels of regulatory knowledge was associated with participation in regulated markets, even when controlled for risk preferences or confidence in one's ability to reach regulatory goals.
  • Among workplace-only regulators, 28% were offered regulatory education by a school or college or a workplace where the regulator was employed. By contrast, 42% of active regulators were offered regulatory education.

"Many regulators, and especially those who make regulatory decisions solely through investigations developed within the regulatory organization, lack regulatory literacy," says Bill Singer, founder of the non-existent BSIIOFREAVGF. "This is a problem that cannot be overlooked. Our findings signal a great need for targeted regulatory education programs that raise regulatory knowledge, particularly in the workplace. Workplace education could help prepare employees for the sort of regulatory decision making that they are required to make."

As the expansion of Wall Street regulation continues, researchers cited an increasing need for regulatory education, particularly through the workplace.

The Bill Singer International Institute of Financial Regulatory Excellence and Vegan Gelateria Foundation

The Bill Singer International Institute of Financial Regulatory Excellence and Vegan Gelateria Foundation (the "BSIIOFREAVGF") is dedicated to advancing research and solutions that open the door to universal regulatory literacy. In working toward that mission, BSIIOFREAVGF has positioned itself as the world's leading incubator for regulatory literacy research, policy, and solutions. BSIIOFREAVGF launched in October 2019 in response to the anger of its founder upon reading one too many idiotic research reports. Since then, it has pioneered breakthrough tools to measure regulatory literacy, developed and advised on educational programs, and crafted policy guidelines aimed at advancing regulatory knowledge in the United States and around the world. BSIIOFREAVGF is presently developing a vegan-hybrid raspberry-coffee chip gelato made from the recycled waste of regulatory press releases. For more information on BSIIOFREAVGF visit the Broke And Broker Blog or the Securities Industry Commentator Feed. 

Before I sign off on today's Broke And Broker Blog, one last thing: Today's article is not a tirade against only FINRA or GFLEC. To the contrary, the nonsense that I complain about has many, many parents. My frustration is not with any one organization but with far too many studies and far too many reports that think they are a substitute for the hard work of investigation and prosecution of fraud. In the end, all of this waste time and effort is tantamount to reading toe-tags at the morgue. The victim is dead. Stone-cold on a slab. Yes, you can tell me how the victim was murdered, but that doesn't stop the onslaught of crime. Reams of data are not solutions. Funds and resources diverted to producing press releases only detract from the serious and meticulous business of regulating Wall Street. 

In an effort to demonstrate that I am an equal-opportunity grouser, consider that the SEC's Office of Investor Education and Advocacy and Retail Strategy Task Force released two videos, which, the federal regulator asserts will "help show investors what fraud looks like." SEC Educational Videos Aim to Help Investors Spot and Avoid Fraud (SEC Release) Moreover, the SEC Release claims that the videos will "provide practical information that Main Street investors can use to avoid fraud and become empowered to make the best investment decisions possible for a strong financial future." I'm sure that you've laughed when you read that an offer is "void where prohibited," or wondered about the point of warning patients "Do Not Take This Drug If You Are Allergic To It." Prepare to laugh at the idiocy of Wall Street's federal regulator warning investors to avoid investing in fraudulent schemes and not to trust crooks with their money! Wow -- what a colossal, shameful waste of tax dollars and a mis-allocation of staff resources. Worse, whistleblower claims flounder in the brackish waters of the SEC Whistleblower process -- WB-APPs are endlessly pending without any updates or guidance from Staff, Awards that have been authorized remain unpaid without explanation. Instead of tackling this enervating failure to timely process its own docket, the SEC diverts time, money, and attention to crap such as these videos: