The Blog Of The Securities Industry Professional Association

WiKi Leaks and FINRA/SEC


Will the inevitable happen sooner or later? 

Wiki Leaks and its founder Julian Assange have spent the better part of three years tormenting the most powerful country and people in the world.  From Hillary Clinton to the NSA, they have been brazen in their attack and release of previously classified emails on a variety of subjects.  On the one hand, we have a smug Assange holed up inside the Ecuador embassy in Europe seeking asylum.  While his theft of personal emails is deplorable on every level, you have to admit that his organization is like the one honest kid in the street who is laughing at the naked Emperor walking down the street in his new robe.  For decades we have been assured over and over about our constitutional rights and have even taken to the streets to protest nominations for Supreme Court Justices and or their rulings on everything from abortion to Miranda rights.  However, with the release of the emails detailing the illegal spying on Americans using their cell phones and emails,  it became clearly obvious that we no longer have the freedoms we previously thought we had.  Its interesting to think that over the last two weeks we have had a Republican and Democratic National Convention and the speakers all argued on either side about a woman’s right to choose to have an abortion, while at the same time my computer, my phone, my internet searches and probably this writing is being reviewed illegally by some government hack in Washington.  Toward that end, we believe WiKi Leaks is a valuable and useful group that is preserving the balance of power in our government. For over 200 years that was the responsibility of the various branches of our government but it is obvious they are more concerned with personal agendas instead of preserving our constitutional rights.  So this brings us to my favorite subject: FINRA and the SEC.

The SIPA has previously released secret documents that our very own crack staff was able to obtain.  From tax returns showing how ten employees of a nonprofit SRO were paid 7 figures or more to our release of a redacted email from a top FINRA official regarding a supposed ‘IRS opinion letter” .  This begs the question:  If a bunch of odd balls working on home computers from Dell and being analyzed by the NSA can obtain secret info, what will happen when WiKi Leaks and its world wide web of highly trained hackers start going for the good stuff?  How will Americans react when they find out that a financial coup was orchestrated upon them beginning in 2005 to eliminate competition in the securities industry?   More importantly, we have already viewed (but not released) an email that clearly shows that in early 2008 FINRA and the SEC were aware that almost all of the top Wall Street firms were not liquid and an emergency meeting was called to help prepare for the Armageddon of Bear Sterns and Lehman going under.   How long did they all know and how come they didn’t halt the trading in these companies’ months before?   Why did the SEC under Chris Cox order a ban on short selling financial firms in the summer of 2008 when it was obvious these companies were under water? Click here for story regarding short selling ban.  The SEC halts low priced securities from trading on a near daily basis but they not only didn’t halt Citi, Merrill, Lehman and Goldman from trading, but they made it harder for the stock to decline by banning short sales against these companies.   We have advocated for a long time that it is time for the regulators to come clean, tell the public what they knew and explain in detail why they continued to allow them to lose money in these investments by proclaiming everything in the market was just fine.  They need to come clean on how they lost nearly a billion dollars of the member’s money investing in Limited partnerships and what their knowledge of Madoff really was.  Sometimes it is better to be the calm person in the room and explain in a controlled environment what exactly is going on rather than let WiKi Leaks cause a financial firestorm if they get a hold of some of these documents and e mails and release it to the public.  It could seriously cause a mass panic and complete exit out the investment door by millions of investors.

A few years ago I went to the Bahamas with friend (and small firm owner) for a week of boating and fishing.  He took us to the actual spot where “Pirates of the Caribbean” was filmed and it was breath taking to say the least.  As my then 8 year old son and my friends daughter went further and further out, I noticed what appeared to be about 4 black tip sharks swimming near them and my heart panicked and I yelled for them to quickly “come back, there are sharks”, but my buddy casually told them “Those are stingrays but you guys need to get back here” and they nodded and soon were back in ankle high water.  I scratched my head and told my friend,” I could have sworn those were sharks weren’t they”? He replied casually:  “They were but I didn’t want the kids to panic and bring attention to the passing sharks because they might think its bait fish”.  Lesson learned.  The kids were still safe but exited the water in a cool calm and collected way instead of a risky panic induced way.

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July 27th, 2016



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