May 7, 2022
There are those investor advocates who detest FINRA's expungement program because they fear it launders Wall Street's dirty linen. Frankly, that's a fair concern. Unfortunately, there are cases when a stockbroker was wrongly named in a complaint or the allegations raised are absurd. Then what? FINRA's answer is to resort to an arbitration process that forces the victim to shoulder significant forum fees and legal costs as the price of entry. It may be a nice cash register for the self-regulatory-organization but that doesn't justify placing a regulatory matter before an arbitration panel. It's not sound investor protection. It's not affordable remediation for a victimized stockbroker.
In "An Essay on Criticism," Alexander Pope famously wrote that "To err is human, to forgive divine." Erring is something that we all do with regularity accompanied by regret and followed by more errors. As the poet said, to err is human, and an indelible aspect of our humanity is our unending ability to make mistakes. As to the forgiveness of our errors, alas, that is left to Divine Providence; and, frankly, when it comes to our financial markets, it's more about the Dark Side. In a recent FINRA regulatory settlement, we are presented with full-blown humanity and very little divinity.
In 2020, the SEC swore in a Complaint filed in a United States District Court that Donald Lee Howard was 65. In 2021, the SEC alleged in a administrative order that Howard was 76. Ummm . . . someone wanna explain to me (and, while you're at it, to the SEC) how a human being aged 11 years in one year. Sort of a Benjamin Button in reverse.