To paraphrase Rod Serling's introduction of the episodes on the old Twilight Zone:
Submitted for your approval is an unassuming page at the URL of http://www.finra.org/Investors/Welcome/P117341 . Here, you will find links to television and radio commercials broadcast by an unusual entity known as the Financial Industry Regulatory Authority or FINRA. These devilishly simple promotional spots lull you with their easy going manner and apparently straightforward message--that is, until you pull back the curtain and see behind the medium and the message.
Nuthin' for sale
FINRA Conduct Rule 2210: Communications with the Public details all sorts of requirements and restrictions imposed upon member advertising and communications. For example, FINRA admonishes its regulated members under Rule 2210(d)(1) that
(A) All member communications with the public shall be based on principles of fair dealing and good faith, must be fair and balanced, and must provide a sound basis for evaluating the facts in regard to any particular security or type of security, industry, or service. No member may omit any material fact or qualification if the omission, in the light of the context of the material presented, would cause the communications to be misleading.
(B) No member may make any false, exaggerated, unwarranted or misleading statement or claim in any communication with the public. No member may publish, circulate or distribute any public communication that the member knows or has reason to know contains any untrue statement of a material fact or is otherwise false or misleading.
When I listen to FINRA's television and radio spots (and, please, you listen too, and then let me know if my hearing or interpretation is off), I keep hearing the same assurance to a likely wary public:
FINRA is a "not for profit resource with nothing for sale."
So, being the trusting kind of guy that I am, I take great comfort in knowing that this paragon of regulatory virtue doesn't sell anything. I know this because they said that they have nothing for sale and, moreover, they are a regulator who believes in fair dealing, good faith, fair and balanced disclosure. Even more to the point, this is an organization that wrote the book on prosecuting false, exaggerated, unwarranted or misleading statements--and this is the same book where they demand that no public communication contain a materially false fact.
Still, maybe you can do me a favor? Visit http://www.finra.org/Industry/Education/ConferencesEvents/index.htm .
You see all those conferences, seminars, and meetings that this non-profit seller of nothing runs? Just click through a few of the listed events. A simple so-called District Preventative Compliance Meeting costs a $30 registration fee. FINRA warns you that "We do not accept cash or credit cards (registration fee is non-refundable)." As such, you are advised to ensure that "your check [is] made payable to FINRA." Not to worry, if that meeting isn't to your fancy, well, good news, FINRA is happy to charge you for a whole list of classes and online learning programs; and, of course, there are those fabulous seminars that they run for over $1,000 a pop, with discounts for members. If you're really flush with cash, inquire about some of the "sponsorship opportunities." That sounds like fun.
Why that puzzled look on your face? Oh, you mean because FINRA advertises on radio and television that it doesn't sell anything? Yeah, I was wondering the same thing. You know, if a company charges folks to attends conferences, seminars, and meetings, isn't that selling something? I always thought that when I paid to see a Broadway show or a movie or a concert that I was buying something from someone who was selling something. Guess you're just never too old to still learn.
And another thing--maybe it's just me (it's often just me, I'm told) but should a so-called non-profit regulator who says it sells nothing even be in the business of charging industry folks for educational programs that will make them more compliant and better able to serve the investing public? That one is a real puzzler. You would think that a regulator would be dying to give away education to its members and their employees. It's not as if we can look around at Wall Street's regulatory landscape with too much pride these days. Maybe more freebie courses from FINRA would have cut down on some of the fraud.
First off, this "Brokercheck?" spot urges investors to "check to see if a broker makes sense for you" at FINRA's online Brokercheck service. Maybe it's me (yeah, again, I know, I'm an oddball) but the implication I think the regulator is trying to send (or at least the logical inference that I am drawing) is that the five guys depicted in the broadcast spot are not all on the up-and-up. The regulator is saying that you just can't tell who you're dealing with these days. Lots of shady characters on Wall Street. Lots of crooks. That's the point of the spot, as I see it. Use FINRA's Brokercheck service and we'll let you know if your broker is a crook. Am I right?
Now, let me make one last point. Remember the scene of the five apparent brokers? Three seem to be Caucasian, one is African-American, and one appears to be of South Asian ethnicity (I would swear it is Aasif Mandvi of the Daily Show, you tell me).
How nice it is of FINRA (and Wall Street as a whole) to finally recognize the existence of minorities within its ranks. Wonderful! Twenty percent of Wall Street's brokers are African American and another twenty percent are South Asian. What a proud record of minority rights. Forty percent of Wall Street's brokers are African-American and South Asian males. Maybe someone can check those statistics out? I mean, you know, the FINRA commercial shows five guys, and only three are white--that's 60%; and by deduction, that leaves 20% as black and 20% as South Asian. I don't think FINRA would have misrepresented the make-up of Wall Street's stockbrokerage ranks. Certainly, not in the context of a commercial suggesting that some brokers are crooks. Then again, how nice that we've come such a long way that FINRA was comfortable even exposing itself to the criticism that it unfairly depicted minorities as representing 40% of Wall Street's brokers.
Then there is this one, last aspect of FINRA's ad. Not a single woman is portrayed!
True, let's be fair. When Wall Street hires women it's more likely than not to be as a secretary, a receptionist, or in some behind the scenes role with reduced opportunities to make the really big bucks. I mean, come on now, walk into a branch office (no, not those that recently shuttered close--go to some that are still in business) and do a boy-girl head count. You probably won't find that many women stockbrokers. But, that is not to say that the good folks at FINRA don't have a role for women in mind. If you look at the regulator's "Bear Market" television commercial, you will see that they have a woman pushing a shopping cart in a supermarket--and she's bedecked in such a nice sweater set too.
In retrospect, maybe FINRA's Brokercheck? spot is sending a fair message--after all, perhaps it's only the males you need to worry about as being unethical brokers, or maybe just the Caucasian, African-American, and South Asian ones. What a fine outcome for Latino and non-South Asian male brokers, and all those women too.
You're traveling through another dimension, a dimension not only of sight and sound but of mind; a journey into a wondrous land whose boundaries are that of imagination. Next stop, the Twilight Zone.