The Blog Of The Securities Industry Professional Association

We Hate To Say We Told You So..

..But we did and nobody would listen

The SIPA has been granted unprecedented access to recently released and soon to be released Court documents that basically prove beyond a shadow of a doubt that members of then NASD were mislead and even deliberately lied to by the powers that be in order to obtain their vote. For a long time certain members of the SIPA have been screaming their lungs out on top of a mountain trying to get someone to listen. Well it appears that day is finally here and the perfect storm against FINRA could finally be lining up. Enclosed you will see a request from the Editor of Barron’s, Dow Jones news magazine, Requesting the court unseal the actual IRS ruling letter regarding the maximum amount that could have and should have been paid to members.

The interesting part of this request is that it is being brought before a newly appointed judge to this case, none other than Judge Jed S. Rakoff. This is the same judge whom the SIPA lavished praise on last summer for standing up to the hypocrisy of Wall street and REJECTING the SEC’s 33 million dollar settlement of a 5.6 Billion dollar fraud. To quote Judge Rakoff in his rejection of the Bank of America fraud case: trivial penalty for a false statement that materially infected a multi-billion-dollar merger.”

Finally a Judge who understands that America is being ripped off and that bad behavior and crime should be punished. This could be very problematic for FINRA when you consider the BOA rejection was handed out to the new head of the SEC in her first test as the leader of President Obama’s ‘change’. The case now before Rakoff personally names Ms. Shapiro as the person responsible for misleading members. The full Second Amended Complaint ( SAC) should have all members irate. Inside the complaint they are forced to redact the actual figures but as you read this it is no longer a case of COULD the NASD have paid more. It’s certain beyond a doubt that they could have paid more and lie to members about having an IRS ruling letter. Click here and read for your self.

Please note that the black marks and other deletions are exactly as they were obtained from the court and the SIPA did not take any literary license as some accused us when we released ‘Assertions and Facts’.

As a member who is now facing fees that are going to triple in cost due to FINRA losing 556 Million dollars in one year investing in hedge funds, you should be contacting your district office and demanding full transparency. There was no cost savings from the consolidation of NASD and NYSE. There was not a 35k limit on the amount of money that the IRS said could be paid out. Last but not least…The NASD failed to advise members that if the NASD SRO was dissolved and a new one created (like congress is examining right now)…..each member firm would have received $300,000 or more…Some of you were right there fighting this tooth and nail but the large majority trusted and believed every word they fed and today ….think about what you could do with an extra $300,000?

We need transparency and this is a good place to start…and then it should be on to the bigger question which is not going away: Was FINRA a Madoff investor?

Stay tuned because we are getting closer and closer on that one.

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October 26th, 2009



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