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Barry Ritholtz: Reuters: FINRA Is Hopelessly Conflicted

TedTed
in Fund Discussions
FYI: This is your must read column of the day: Via Reuters, Wall Street’s self-regulator blocks public scrutiny of firms with tainted brokers.

FINRA oversees about 3,800 brokerages and 630,000 brokers. If you want to understand why “self-regulation” does not work, this is it:
Regards,
Ted
http://ritholtz.com/2017/06/reuters-finra-hopelessly-conflicted/

Comments

  • msf
    From the Reuters article cited in the column:

    "FINRA responded with a letter on June 15 of last year saying that it closely oversees firms 'to determine whether they present a heightened risk to investors.'”

    Oh we're not a regulator enforcer, we're a regulation monitor. Those 48 brokerage firms? There's a problem.

  • rforno

    Brokers and other Wall Streeters can't be trusted? I'm shocked ... shocked, I say! /sarcasm
  • Ben
    FINRA has a special division for assisting seniors. The clerical division of a mutual fund family made a terrible mess of transferring $ from my wife's IRA from another unrelated fund to one of their funds (one which is well managed by the fund managers). The phone got us nowhere. We wrote to the receiving fund clerk division, documenting their error and doing the arithmetic for them showing how much $ was lost due to their ineptitude. It took months and months to get any reply and in the months between the replies it was always "soon" that they would look into it. I got in touch with FINRA. They got right on the case. A few days later we got a phone call from the "Whoops Division" of the inept fund family. Not only would they restore to my wife's account the money they had lost but also the money she Would Have Made (!) from interest and dividends had they made the transfer properly. And that is exactly what they did.
    VIVA FINRA!
  • BobCBobC
    This article is a good example of why those of us in the RIA profession do not want FINRA to be given any authority to regulate us. They employ a classic edition of choking on gnats and swallowing camels. From a PR standpoint, they will occasionally step forward to assist, as Ben noted above. And they will publicly tout all the fines they have assessed each year. But having FINRA, which is essentially paid and funded by its member organizations, regulate an essentially corrupt system that has fought fiduciary implementation forever is living in la-la land.
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