The Blog Of The Securities Industry Professional Association

The Insanity Must End!


Time to Stop Attacking Brokerage Firms

Americans have witnessed firsthand the acts of terror here in our homeland and abroad in Europe. We are constantly reminded to stay vigilant and to make sure we report everything we see that we deem suspicious. Despite this constant reminder from government officials, we have seen time and again where dangerous people and activities were reported and the government declined to follow up or take action and disaster has followed. In the massacre of my own Orlando town, fellow employees and gun shop owners contacted law enforcement to take a close look at this possible terrorist but in the end they let him slip off the grid. Perhaps its time to free small brokerage firms from this huge responsibility of reporting non stop on their clients to the Federal authorities and FINRA. Right now owners of FINRA firms are under nonstop and intense scrutiny to comply with rules and regulations that the elite class and the cartel Wall Street firms do not have to face. The regulation of Email in a non editable/delete able format came to fruition because of Wall Street big wigs “putting lipstick on a pig” long enough to sell their investments in Enron and WorldCom. Each month we read about the latest victim of this expensive and vague rule that is supposed to protect all Americans, yet our FBI Director recently came out and called our presumptive nominee for President of the United States, reckless, careless and negligent with top secret emails. Call me crazy (and many have!) but I would think that it’s more important to make sure top secret US secrets with world peace hanging in the balance, is a little more important than if ABC Securities is sending an email internally wondering if they should sell their 10,000 shares of a .23 cent stock? What are we doing here? How did it get this bad?

We have all these rules, regulations and restrictions but they only apply to a few groups. It’s just unimaginable that a small FINRA b/d can be fined $25,000 for not having the right email format but a person sending emails about our Embassy being attacked can use a server in a Colorado bathroom and have 30,000 emails disappear? Since 9-11 a lot of  laws with good intentions were enacted that basically approached only one segment of our economic industry: The brokerage industry. The laws that evolved from 9-11 are perhaps the biggest waste of time, money and resources ever imagined. Month after month for over 15 years now we read about red flags, Suspicious Activity Reports (SAR’s) and Anti Money Laundering (AML) violations and what has been the net result of this overwhelming use of regulatory force? About 30,000 dead over the last 15 years since the 9-11 attacks. Most of them have been Muslim, but recently America and Europe have been facing hundreds of deaths as a result of the terror groups we wanted to stop. Lets face it, the FINRA AML policy is a failure. What has it accomplished in the last dozen years?

The attackers in San Bernardino had a cache of weapons at their disposal, the attackers in Orlando also had access to funds to purchase weapons and explosives, so why this obsession to make life miserable on a brokerage firm in Armpit, Arkansas? The war on terror is real and we believe any FINRA brokerage firm would turn over information in a heartbeat to the FBI if they thought our national security was being threatened. But there is a HUGE difference between a client selling two million shares of a .05 cent stock and somebody blowing up things in the name of Islam. The use of Suspicious Activity Reports or SAR’s is one of the biggest boondoggles ever created. If people just took the time to really think about this ridiculous program they would laugh until they cried. Let’s break this down for a second:

• A client deposits 500,000 shares of a low priced stock

• The brokerage firm in PoDunk, Missouri decided this should be reported because they could be fined for not filing a SARs

• They still SELL the stock but they file a SARs report and make a file in a drawer of the report for FINRA review at next year’s audit.

• The client is then sent a check for $75,000 for the sale of this stock and the brokerage firm makes a record that states it was a wired in excess of $10,000. •

FINRA comes in and a 27 year old accounting major who graduated from Pace University 3 years ago gives an approval of the record keeping.

Yay! The world is safe and none of that money was used to finance terrorism because we kept a record! The federal government has broadened its powers so much over the last 15 years, yet we still require a list of all wires over $10,000? The Secretary of State couldn’t keep it a secret that she was using a backup server for top secret emails but unless Bob Smith from XYZ Securities notifies FINCEN and FINRA of a stock certificate being deposited we are to assume another terror attack is coming? The truth of the matter is the NSA, FBI and IRS know exactly what is going on regardless of these silly reports so why not just free small brokerage firms from these shackles? What do you think?

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July 20th, 2016



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