The SIPA

What the Supreme Court decision might mean for you The recent ruling by the Supreme Court not to hear the appeal of the Standard Chartered is not a shocking surprise to many due to the sheer mass of appeals the Supreme Court is inundated with each year.  Our guess is that about ten minutes of [...]

Follow the money Recently the acclaimed “Oracle of Omaha” Warren Buffet continued his calls for Americans to pay more to the federal government by way of taxes.  Warren has been telling everyone who will listen that he should pay more in taxes and so should other Americans.  The rhetoric by this buffoon is being hailed [...]

Happy New Year from all of us at the SIPA.   Before we start pondering the future for the Securities Industry we thought we would take a look back on 2011 and review the lessons we learned in the past year. Lesson #1:  The more things change the more they stay the same. Whether it was [...]

Mortgage crisis hits home As the country’s mortgage crisis spirals out of control and thousands upon thousands of homeowners walk away from their under water home, I can’t help but wonder if secretly the 600,000 stockbrokers are quietly smiling inside as the rest of America gets a taste of what its like to be a [...]

I’ve had it with Washington! Enough already with your games, policies, deals, budgets, summits, partisan plans, jobs bills, debt deals, ENOUGH! You are all morons who have absolutely no idea how to create a job or wipe your ass without appropriating a sub committee to review the environmental effects of the toilet paper while appropriating funds for after wiping counseling for those who get diaper rash or a hemorrhoid.

Honey, I think we may have a problem..we have over $50,000 in credit card debt and our home equity loan is maxed out and our bank account only has a couple hundred bucks in it until I get paid again next month. I don’t think we can do that Disney cruise we planned for later this year with Tom and Nancy. Not sure we can get Marcia that nose job either and Bobby may have to just keep wearing hand me downs

Bernie Madoff is in jail for taking money from investors and then using that money to pay off early investors yet our leaders are saying unless we can write 2 trillion dollars worth of bonds we will default. Maybe they should have done this with Madoff and asked for permission to sell 50 billion in bonds to pay off all the victims?

Busacca, who aired his grievances to me in a phone interview, complains that Finra won't take legal action against large firms but has become extremely picky when dealing with small Broker/dealers.Representatives of the small firms who sit on Finra's 22-member board are outgunned by those that represent big- and medium-sized operations as well as the 11 appointed public members. Just a couple of years ago there were more than 6,000 small independents in the brokerage industry, providing thousands of jobs. That number is now down to around 4,100 and there's been a big drop-off in just the last few months.

If you recall, In January we released a story tracking Berkshire Hathaway to Goldman Sachs and other powerful Wall Street names Click here to read and suggested that the Wizard of Omaha may not be as clairvoyant to market and economic trends as he has indicated. I even received some scathing e-mails from readers who were aghast that I would even suggest that Berkshire would trade on inside information. A few short weeks later we learned that the CEO of Berkshire was trading on inside information:

When I talked to several fellow committee members privately I was surprised to learn how much we had in common in our views and perceptions of regulation. The only problem was that several expressed concerns to me about raising their voices or offering their opinion for fear of alienating their FINRA examiners.

The real worry is if oil is no longer priced in U.S. dollars and instead switches to the Euro or Yen or Cheech and Chong. Quite frankly, once oil is no longer priced in U.S. dollars our prices will double overnight from their current levels. Washington doesn’t want to address this however and instead is focusing on Oil companies and price gouging.

President Obama's strange way of calculating everything from unemployment rates to budget cuts could be the key to showing economic growth in other areas. Unemployed people are being dropped off the unemployed list so why can't unsold homes be dropped from the unsold inventory list? read the full story for our ideas.

FINRA’s recent proposal to require more back office personnel to be registered is the latest in a series of head scratchers for the regulatory giant that is under fire by Congress for not protecting investors. The timing and the need for the proposal is in direct contrast to the needs being laid out by their big brother at the SEC

Some where along the way the unions went from protecting workers to intimidating them as well as our Government. I never really understood this phenomenon. GM, Ford and Chrysler have had strong unions for years and years and it afforded workers solidarity and negotiating power. That was until a guy with a high school education started making $80,000 per year to run a bolt through some sheet metal.

Given the fact that our highly regulated brokerage industry caused the collapse of the free markets and our economy, I don’t think we are in a position to ask that others fall under our regulation. I’m not sure we should be worrying about more Madoff scams when in fact FINRA dropped the ball on both Madoff and Sanford as well as a dozen others.

We hope that FINRA's attempt in all this is to allow a truly fair and open system rather then trying to dilute the vote among small firm candidates while counting on their pet trade organizations to support a single candidate of their choosing. Even if that's the case it will still be the voice of the small firm and this is what we have been fighting years for The SIPA intends to sit this election out and allow the members to decide for themselves who should speak for them.

The decision by the Trustee is puzzling on so many levels I almost do not know where to begin so In keeping with my theme from my speech last week to Broker Dealers at the Financial Services Exchange meeting in Atlanta: Follow the money!

I could not understand what sort of Business savvy former and current regulators would bring to a board. They obviously do not know marketing nor food coloring techniques that appeal to 5 year olds eating macaroni and cheese so why the mutual attraction ? As always just ask one simple question: How is Goldman Sachs involved in this?

There are so many people that I would like to thank for being a part of my life but it would be impossible to list them all here wouldn’t it? On second thought, maybe its time to live for NOW and not worry about time so in no particular order I just want to thank the following people for being an important part of my life in 2010 and hopefully in the years to come…

Mark Madoff, the troubled son of Ponzi master Bernie Madoff was found dead over the weekend from an apparent suicide. In other news, Frank Pantangeli slit his wrists while in prison just hours before he was scheduled to testify against Michael Corleone, apparently he was distressed that his brother was flying back to Sicily. In Brooklyn, Frankie Carbone accidentally locked himself in a frozen compartment of a meat truck and froze to death and Jimmy “Two Times” was the victim of a robbery on a deserted street.

The economy has been in the toilet since 2007 and although everyone keeps saying “the 2nd half of next year we should see a rebound” the stark truth is that there is no rebound in site and anyone saying differently is either a shill for the government or an absolute moron. The Financial Reform Act which was thrust down the throats of Financial Institutions and taxpayers will be the “Grinch that Stole Christmas”.

Say what? Merrill Lynch is a small firm? Last I checked they were one of the largest firms on the street with more reps then most cities. Now I know that they have many divisions and brokerage arms at these mega firms but give me a break.

The Republicans swooped into office and now everyone is expecting huge change in Washington yet your first evidence of more of the same was the speech by minority leader John Boehner on election night. Lets be realistic, this race was fueled by the phenomenal success of the Tea Party and they are the ones who energized the campaign, yet once victory was secured in comes a 21 year congressmen with a nice suit, overly tanned and full or pats on his back when in fact he offered little or no support to tea party candidates who were running under the Republican ticket.

We can only do so much here and we think its important to let the candidates know how you feel instead of just beating us up. We are here to help the small firms and brokers out there and unlike other group sout there we believe in accountability and if our guys aren't living up to their word then we will find others that will.

As it turns out maybe Lisa Roth was the only one being truthful or perhaps was the only one who would have the gumption to stand up to the FINRA board. That remains to be seen but the point is that the explanation given by FINRA is the exact SAME explanation that was included with the proxy ballot. As outlined last week, the rationale behind the lack of transparency makes no sense at all

On the surface this seems reasonable to an untrained ear, however when the top ten employees are making over a million a year in base salary without any limits on their capacity to earn more, doesn’t this affect their ability to regulate as well?

Am I the only one noticing that almost all economic data coming out of our Government is not only false and misleading but is often times wrong? More importantly , most of the Financial press out there seems to roll over and not even question numbers that are either flat out wrong or are more propaganda then reality. Take today’s jobless claims for instance. The Associate Press reported: “New unemployment claims fall to lowest in 2 months

The message sent to Wall Streets elite firms is that if you commit securities fraud you may have to use your debit card to pay the fine and do not worry about jail time as long as you sing like a canary after your caught. Poor ‘Snooki” apparently takes her Italian heritage seriously and decided not to betray her family on Jersey Shore. Too bad she didn’t have info on Joey taking steroids to get better abs. The best part is the judge in the case lambasting Snookie.

Let’s start with the first fact, that the recession never really ended. I know all the economists out there will tell you differently and will show you a chart and technical garbage to disprove this point but the reality is that almost each and every month our government has been claiming one set of numbers and then restating them often times dramatically the next month.

The recent FINRA Board election was nothing less then astounding considering the fact that the SIPA members faced not only strong challenges by well known FINRA nominees but by habitual board candidates that appeared to try and dilute the dissident vote as a favor for FINRA. Much to our surprise though, the members and supporters came out in droves and quite frankly the margin of victory was nothing short of astonishing.

The SIPA has been asked to help moderate a “Meet The Candidates” forum on Friday July 30th at the Financial Services Exchange meeting being held this week at the Ritz Carlton in Fort Lauderdale Florida. Candidates for the three FINRA Board of Governors seats include Jed Bandes, Joel Blumenschein and Ken Norensberg. In addition, invitations were also extended to other candidates who were appointed by FINRA and as of this writing only Lisa Roth has agreed to attend and we credit her for being open to this question and answer.

With this in mind all three candidates have agreed that upon being voted onto the board their first order of business will be to immediately demand the board to distribute a minimum of $35,000 in funds to all member firms of record. In addition, the candidates believe that if a higher payment is possible, that the funds above that also be immediately distributed to the member owners. This is your money not the regulators

Do you trust FINRA? It’s a simple yes or no answer that is at the heart of this election. Do you believe FINRA has YOUR best interests in mind or do they cater to a certain segment of Firms? If you believe that FINRA has shown itself to be completely trust worthy, then by all means vote for their handpicked candidates.

Over 100 Million dollars of YOUR money was paid out to the top executives of FINRA over the last four years, yet this organization told you that the IRS would only allow a payment of $35,000 to you. While you are fighting for survival, the compensation paid to these people at FINRA has swelled to proportions that would make John Thain of Merrill Lynch fame blush.

I’m a clueless small business owner who can only judge things from my eyes and ears on the street. Instead of quoting Greenspan and Bernanke , I’d rather quote Bluto from Animal House after they accidentally killed the horse in the Dean’s Office…I believe the words of shock Bluto uttered over an over again were: “ H-O-L-Y S-H-I-#!..H-O-L-Y S-H-I-#"!!

Let’s take a look at 2 brokers in 2 different offices both looking at British Petroleum for their customers for two different reasons. The first broker believes the spill is overblown and that with 64 billion in net profits the previous year and a dividend yield now approaching 9% it’s certainly worth a 10,000 share investment. The second broker believes the worst is yet to come and thinks BP could go bankrupt from this massive oil spill so he decides to take advantage for his customer who favors aggressive investing and he wants to go short 10,000 shares of BP.

One would think that in light of the financial meltdown as well as the Financial Reform being proposed by Congress that FINRA would seek to reform or maybe even change its current Board and get new blood in the system…But no, not FINRA. FINRA re nominated the existing Head Governor as well as numerous other existing board members to new terms. This makes sense only if there is a bigger picture which fools like me often overlook.

The Securities Industry Professional Association and the Independent Broker-Dealer Association today called the recent FINRA Board nominations “a back room closed door process.” In an unusual joint release, they charged the FINRA Board Nominating Committee with appointing “selected” proxies who will continue the dysfunctional policies of the Board.

As I read the SEC press release on Friday charging Goldman with fraud I couldn’t help but laugh and wonder if they contacted Mario Puzo and asked for advice on how to get the swirling controversy around them to subside. The fraud charges are comical at best due to the fact that one person from Goldman was named in the SEC indictment.

The SIPA has been waging battles for your rights for a few years now but long before we picked up the sword and decided to run with it, others were fighting the fight. Allan Davidson is one of the original if not THE founder of the dissident movement against unfair regulation.

This is either the biggest farce or the most ingenious way to bilk and abuse investors and then obtain help from FINRA in making it impossible to get redemption. It is our humble opinion that investors who were out 50 million would give anything to get a $25 million settlement right now, yet that chance has come and gone.

Perhaps congress can get together and grant the Fed the right to control interest rates while they are at it? Maybe Congress could give the SEC the power to curb or eliminate things like naked short selling, buying mutual funds yesterday with today’s news and cracking down on illegal ponzi schemes?

mediocre stockbroker duped Wall Street titan Merrill Lynch into believing he was a portfolio powerhouse -- deserving of a $780,000 loan his first day on the job -- then used the dough to buy a Ferrari and split, prosecutors said yesterday.

The Washington Post reported yesterday that employees and high ranking officials of the Securities and Exchange Commission were accessing pornography sites and watching hours of porn every day for a long time.

Has there ever been and administration as crossed and confused as this one? The Bush administration was consistently Pro business and in many respects Consistently poor!. However, the Bush administration made clear its intent to allow free markets to prevail no matter what and even if Oil hit $500 per barrel, a free market system was better then Government intervention. The Obama administration however is trying to be all things to all people.

The new Obama administration promised change and change was delivered all right. Trillions of dollars were borrowed from China in an effort to get the economy and more important the jobs created. One year later and the administration is learning the hard way what all of us in the Brokerage world already know: The Government does not create lasting jobs, the private sector does.

Now that the figures are finally released I would like to take a moment and remind everyone that members of the original dissident group known as the Financial Industry Association (FIA) were called liars because they claimed that the merger could pay to members much more then the mere $35,000 that the NASD was offering in exchange for giving up their voting rights. In fact, the former head of NASD even said in a podcast to all members that “It just isn’t true what members of the FIA are saying”.

In Shakespeare’s Julius Caesar, Marc Antony gives the stirring eulogy that was supposed to pump up Brutus while stomping on the grave of the murdered Caesar. The opposite occurs as he delivers an impassioned speech that has the citizens mourning for the good old days of Julius Caesar’s rule. Over the years we have been a very vocal critic of FINRA policies and deservedly so in our opinion. We have even speculated that FINRA may be on the way out the door due to the failures of Wall Street’s largest firm and the Madoff debacle. Today however, we come to praise FINRA!

The SIPA has been receiving countless e-mails and phone calls from members and non members asking how they should vote. Based upon the NAC election many feel comfortable the SIPA will give them a blunt and honest assessment of the candidates. We would love to wave a magic wand and tell thousands across the country how we think they should vote but quite frankly, the SFAB is a quite confusing and mostly ineffective group

Small firm voice being heard…Board of Directors next? Stephen Kohn’s contested bid to win a seat on the FINRA National Adjudicatory Council was a smashing success for all small firms. Although FINRA does not release the actual figures, an independent poll conducted by SIPA indicated that the vote was overwhelming. The SIPA congratulates Mr. Kohn [...]