A personal message from Bill Singer, publisher of the “Securities Industry Commentator" and the “BrokeAndBroker.com Blog”:
In “A Call for Boycott: FINRA Board of Governors’ Cowardly Silence Becomes Thunderous” (BrokeAndBroker.com Blog / May 1, 2023), I called for the immediate recall of all sitting FINRA Governors; and, thereafter, reconstituting the FINRA Board with Governors who will ensure that the regulator’s culture adheres to a “tone from the top” approach. Further, until such time as FINRA demonstrates a sincere commitment to reform, I urged all FINRA member firms to instruct their Executive Representative to not cast a vote for any candidate in any FINRA election by way of a boycott.
My advocacy for the recall and ensuing reform was predicated upon the incomprehensible appointment of Goldman Sachs’ General Counsel to FINRA’s Board in 2021 -- at a time when that large FINRA member firm was embroiled in a pending Class Action alleging civil and human rights violations. By way of context, on September 10, 2010, plaintiffs filed their initial Complaint asserting claims for gender discrimination in pay, performance evaluation, and promotion under Title VII of the Civil Rights Act of 1964, and the New York City Human Rights Law. On March 30, 2018, the case was certified as a class action; and trial was set to begin on June 7, 2023.
In January 2021, the FINRA Board of Governors appointed Goldman Sachs' General Counsel to fill the Floor Member Governor's seat. There was no election. The Governor was hand picked, and her appointment was approved by the full Board. The Governors who voted to approve the nomination knew or should have known about the troubling allegations set out in the pending 2010 Class Action against Goldman Sachs.
In 2021, no FINRA Governor reportedly challenged the appointment of Goldman Sachs' General Counsel to the Board of Governors of Wall Street's leading self-regulatory-organization. In 2022, as the shocking allegations mounted, no FINRA Governor reportedly requested the resignation of Goldman Sachs' General Counsel. Even in 2023, amid a flood of allegations and evidence, FINRA's Board of Governors said nothing.
The appointment of Goldman Sachs' General Counsel by FINRA's Board placed the self-regulatory-organization in an unflattering light of hypocrisy given its efforts to depict itself as a bastion of inclusion and diversity: "FINRA Creates Industry Diversity Advisory Committee / New Committee Highlights FINRA’s Commitment to Improving DEI in the Securities Industry" (FINRA Release / November 9, 2022)
https://www.finra.org/media-center/newsreleases/2022/finra-creates-industry-diversity-advisory-committee. Talk about saying one thing yet doing another!
As was just reported, Goldman Sachs agreed to settle gender discrimination charges by 2,800 female associates and vice presidents at a cost of $215 million. “Goldman Sachs to pay $215 mln to settle gender discrimination lawsuit” (Reuters / May 9, 2023)
FINRA's bedrock regulatory rule states:
FINRA Rule 2010: STANDARDS OF COMMERCIAL HONOR AND PRINCIPLES OF TRADE
A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade.
Discrimination and harassment are not recent issues for Wall Street's regulators to confront. As I noted many years ago in "Why Is The NYSE And NASD Soft On Racism And Sexism?" (BrokeAndBroker.com Blog / March 9, 2006) http://www.brokeandbroker.com/10/nyse-nasd-sexism/
Please, show me the cases those regulators brought in the past 50 years in which member firms were charged with permitting racial or sexual discrimination/harassment. And what's the message? The regulators unwittingly encourage intolerant behavior by not deeming these practices to be conduct that offends basic notions of "high principles" and "honor." Do the SROs see such conduct as nothing more than an indiscretion?
. . .
I hear these heart-rending stories virtually every day when I am contacted by potential clients. If this cancer is tolerated by Wall Street's regulators, how will we ever destroy it? If the NYSE and NASD see fit to bar folks from the brokerage industry because they have had felony convictions for drunk driving, then it's high time we roll out the same artillery to combat illegal discrimination.
Despite decades of discrimination and harassment at many of its member firms, FINRA failed to file charges . . . failed to take action. If sexism and racism are not among the most classic examples of commercial dishonor, what is? If sexism and racism are not the hallmarks of injustice and inequity, what is? Presented with this squalor on Wall Street, no one on FINRA's Board ever spoke up, and even today, no one is speaking out. Instead of action we get press releases, outside consultants, white papers, and blue-ribbon panels.
Gender/racial discrimination is not a dirty, little secret on Wall Street. It's long been out there in the open. The message from those in power is to look the other way, keep quiet, and don't rock the boat. Now, in 2023, when we are confronted with the reality of Goldman Sachs' $215 million settlement, it is absurd to pretend that nothing was ever amiss. And yet, despite all of that, those who know better, those who should speak up and speak out, still shrink from their ethical and moral obligations. FINRA's Board is silent. Wall Street's regulators are silent. Wall Street's trade groups are silent. It is all deafening.
There is no commercial honor, no justice, no equity when it comes to the regulation of Wall Street. The industry is a cesspool that many smell but few admit to seeing. There are none so blind as those who will not see. The most deluded people are those who choose to ignore what they already know.
SCOTUS: The right to valuable economic information needed to make discretionary economic decisions is not a traditional property. Overturns conviction of developer Ciminelli.
CIMINELLI v. UNITED STATES ET AL. (Opinion, United States Supreme Court / No. 21-1170 / 598 U.S. ___(2023)
SCOTUS: Implying that the public has a right to a private person’s honest services whenever that private person’s clout exceeds some ill-defined threshold—is too vague. 2Cir reversed for error.
JOSEPH PERCOCO, PETITIONER v. UNITED STATES (Opinion, United States Supreme Court, No. 21-1158, 598 U.S. ___ (2023)
1Cir Overturns Two Varsity Blues Fraud and Conspiracy Convictions
United States, Appellee, v. Gamal Abdelaziz, Defendant/Appellant
United States, Appellee, v. John Wilson, Defendant/Appellant
(Opinion, United States Court of Appeals For the First Circuit)
Congressman George Santos Charged with Fraud, Money Laundering, Theft of Public Funds, and False Statements / Santos Allegedly Embezzled Contributions from Supporters, Fraudulently Obtained Unemployment Benefits, and Lied in Disclosures to the House of Representatives (DOJ Release)
Former Coinbase Insider Sentenced In First Ever Cryptocurrency Insider Trading Case / Ishan Wahi Was Sentenced to Two Years in Prison for Tipping His Associates Regarding Crypto Assets That Were Going to be Listed on Coinbase Exchanges (DOJ Release)
CFTC Charges Commodity Pool Operator Tyche Asset Management LLC and its Controlling Principal in a $6 Million Commodity Pool Ponzi Scheme / Charges Include Fraud, Co-Mingling Commodity Pool Funds, and Lying to the National Futures Association (CFTC Release)