Blog by Bill Singer Esq WEEK IN REVIEW

December 17, 2022
In a recent FINRA regulatory settlement, I'm willing to give the regulator and the Respondent's former broker-dealer employer credit for being in the right. So there. I'm even prepared to concede that the Respondent rep was in the wrong. So double there. Notwithstanding all of that crediting and conceding, something doesn't sit right with me. We got a newborn baby. We got a father on paternity leave. We have a world locked down under the unrelenting onslaught of a killer virus. Did any of that get factored into FINRA's imposition of both a fine and a suspension?
Whether realistic or merely imagined, the mere perception of bias or favoritism within any regulatory sphere is corrosive. In a recent regulatory settlement, FINRA, Wall Street's most important self-regulatory-organization, responds to the alleged misconduct of one its largest member firms, Edward D. Jones & Co., with tepid sanctions, among which is the laughable imposition of a Censure, which has virtually no impact and amounts to whipping someone with a wet noodle. Yes, FINRA also imposed a $1.1 million fine on the firm; except, that's about the cost of a day's worth of toilet paper for Edward Jones. In the end, this comes off less as effective regulation and more as a folded $10 bill in someone's palm that is then pressed, somewhat surreptitiously, into the receiving palm of someone else. All of which renders FINRA's approach to regulation as an act akin to tipping someone who gets you a better table at a busy restaurant.
A small FINRA broker-dealer alleged that it had been raided by another firm with devastating consequences: The victim ceased virtually all operations. Down but not out, the small firm sued the raider and won just under $1 million in damages, costs, and fees. Perhaps sensing the enemy closing in, the raider embarked upon a scorched-earth policy by ceasing business and filing for bankruptcy. Now what? The raider started the war but the small firm wasn't agreeing to an armistice.