The SIPA

  Justin Sullivan | Getty Images Starbucks CEO Howard Schultz speaks at the Commonwelth Club of California on April 4, 2011 in San Francisco, California.  Schultz discussed his tenure as Starbucks CEO and promoted his new book “Onward. – How Starbucks Fought For Its Life Without Losing its Soul” I recently asked a colleague about [...]

  I recently came across a powerful blog post written by Jason Tapp called Building the case for Building Trust. With Jason’s permission, the article is reposted below, followed by some further research performed by Trust Across America that supports Jason’s case. – Barbara Kimmel Trust is thought of as a form of social capital, [...]

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?

Erroneous policies of the Regulators, whose one size fits all approach, are eroding the business and causing our small firm saviors to shut their doors. It is the equivalent of dropping an Atom bomb on an ant. They just do not get it!

This election is very important and we need the Members to show a unified front. If you surround yourself with positive people, you will achieve positive results....believe it! Enclosed is my resume and other important information about this election and my history.

A veteran of severla Financial Industry Association election battles, Ashley will be using her experience In her new role with The SIPA. She plans on implementing membership dues and organizing the long term goal of becoming a new SRO. In addition member benefits unlike any other trade organization will be unrolled later this fall. This will include health benefits, legal defense teams for members experiencing FINRA problems and more prominent voice with Congress. Membership in The SIPA will still be open to all persons associated with the financially regulated firms.

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.

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!

AS WELL AS AN INCREASE IN COMMISSIONS Houston we have a problem. Perhaps no phrase has ever spoken more about a problem than these famous words from Apollo 13 years ago. One little problem turned into thousands of people working day and night to try and solve a ‘problem’ that eventually led to the safe [...]

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

By Larry Doyle Sense on Cents FINRA can talk about transparency and integrity all it wants. We all know talk is cheap. FINRA’s board and executives need to show America how they truly define and embrace transparency and integrity. How so? FINRA is scheduled to hold its first Annual Meeting in almost three years on August [...]

How did we, the small business Members of FINRA with 92.7% of the Membership acquire such a contaminated Member? The answer goes back to the original formation of the NASD created as a small business buffer between the SEC, Congress and the Members.

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.

Recently The SIPA has been working with Independent Broker-Dealer Association (IBDA) on regulatory reform and has supported their efforts to speak on behalf of the small firms and registered representatives face to face in front of Congress. We encourage all members to continue to support their efforts and to get active in the fight for regulatory reform that makes sense. IBDA and SIPA member Tomi Olsen has recently met with Rep. Barney Frank and enclosed is a brief recap of her work .

Larry Doyle Sense on Cents Are the days of Wall Street’s self-regulatory organization known as FINRA numbered? In the opinion of the very credible Project on Government Oversight, they should be. Why? Significant failures, massive conflicts of interest, and more. POGO’s comprehensive and scathing letter to four separate House and Senate committees touches upon every [...]

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.

There is no excerpt because this is a protected post.

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.

Is Undue Influence Being Asserted Against Small Broker Dealers The SIPA has received reports from owners of small Broker Dealers concerned that undue force is being exerted on them by sitting members of National Adjudicatory Council (NAC). We have independently verified these reports, and they appear to be true. Apparently,

Please contact us when your ready and we will point you to a PCAOB Accountant that is in your area and price range. Eventually we will be posting as a resource to all readers of BDexchange’s Newsletter and The SIPA will be posting the contact info on its site shortly. If you are one of the lucky firms that has a PCAOB Accountant that has not taken advantage of the new requirement then let us know and we would be happy to add him or her to our growing list.

Effective January 1, 2010, FINRA is increasing the regulatory fees that are paid by all broker dealers. The Personnel Assessment (“PA”) is doubling. In their August 20th rule filing, FINRA explains that due to increased enforcement, rulemaking and examinations costs, they must “stabilize its revenues and provide protection against future industry downturns.” I guess losing all that money in the market took its toll on their budget, but that’s a different article.

Previously, we here at The SIPA have questioned the investment losses of FINRA and wondered out loud if they may have invested in Madoff….well we could be about to find out.  A lawsuit has been filed against FINRA by a member firm that alleges conflict of interest as well as demands the books of FINRA [...]

On Monday August 3rd the SEC announced it was bringing charges against Bank America for fraudulently representing to shareholders that bonuses would NOT be paid to Executives of Merrill Lynch and then disbursing over 5 BILLION in bonuses simultaneously with the approval. Incredibly, BOA announced later that day that they had agreed to terms with the SEC and would pay a 33 million dollar fine to settle all charges.

SMALL FIRM SIPC TAX! How the Government is taxing small businesses Recently sticker shock had eyes popping out of their head all across America as Firm owners received their SIPC bill. For nearly 14 years the SIPC insurance cost of a brokerage firm was $150.00 flat fee paid annually. That changed dramatically for firms in [...]

States are desperate for revenues. Now some are mulling the possibility of going after sales taxes for business conducted for clients within those states, adding yet another layer of fiscal burden for Broker Dealers and individual advisors registered in those states. David Sobel covers this developing story. The current budget crisis has hit many states [...]

By Larry Doyle Everybody knows Auction Rate Securities (ARS) were cash or cash-like, correct? FINRA certainly did NOTHING to protect investors from the ARS sales and marketing scam perpetrated on investors. FINRA spokesman Herb Perone would like to wash his hands and those of FINRA of any negligence or incompetence in regard to FINRA’s investments [...]

In the wake of Madoff and other frauds, the SEC warned on March 9 that “the staff has determined that, in order to perform a valid verification of Assets, the staff must request independent confirmation of investor assets from various third parties” including your clients themselves. We can only imagine just how reassuring a call [...]

The SIPA wishes a heartfelt congratulations to Mr. Alan Davidson of Zeus Securities, upon his election to represent the interest of small firms in the National Adjudicatory Council (NAC). The NAC reviews FINRA disciplinary decisions. The election is of special significance because it was contested and Mr. Davidson ran as an independent candidate.  Despite the [...]

Release in PDF <here> Court Order in PDF <here> New York, March 18, 2009. Today, the Second Circuit Court of Appeals revived a  previously dismissed class action complaint in Standard Investment Chartered Inc v. NASD, et al, Appeal # 07-3372-cv.  The defendants in the suit are the NASD now known as FINRA, former FINRA CEO (and now Chair of [...]

Truth Is In The Eye Of The Beholder Last week the SIPA released documents that clearly contradict what NASD told member firms regarding the buy your vote sham merger of 2007.  Today we release even more shocking documents that once again hit at the nerve of regulation and forces all of us in the industry [...]

The 64 Thousand Dollar Question (isn’t that quaint? $64K? Try $1.25 Quadrillion on for size… No, $64K just sounds better. Sounds manageable)  nowadays is what should be done. The SIPA has polled members and has had conversations with many small firm owners compliance professionals regarding this issue. We are still a ways from a formal [...]

One of the smaller but nevertheless interesting informational items contained in the internal FINRA documents provided to the SIPA is that the FINRA, in planning it’s “Sell Job” for the amendments which would allow the merger is that the FINRA made use of so-called “Friendlies”. These were individuals at organizations who  promised support to the [...]

A SIPA Special Report Uncovers Deception At Every Level – And Has The Documents Which Prove It   John Thain, the former head of NYSE and most recently Merrill Lynch, has resigned his position after the takeover by Bank of America was announced.  Thain was is the classic face of Wall Street greed.  He was hand [...]

Believe it or Not, FINRA Wants To Be Big Brother – But Not To Protect And Serve The Public Last week, we reported some very disturbing facts. And people are just starting to understand the ramifications of what was uncovered. A pattern of potential fraudulent misrepresentations, used to buy votes, to disenfranchise Membership, and to [...]

One of my favorite quotes of all time is Sherriff Brodie in Jaws backing up slowly from the eyes of a monster with a cigarette butt dangling loosely from his mouth and whispering “ WE’RE GONNA NEED A BIGGER BOAT” Can any one line better sum up 2008 on Wall Street? Wall Street and our [...]

  Many members have remarked upon Ms. Shapiro’s tremendous capabilities as an administrator and leader, as well as her overall likeability factor. Others, however, have been critical of the tone and focus of her administration, as well as her handling of the events which arguably lead to the Financial Crisis. But whether because of or in spite [...]

This morning we sent out an update regarding developments with Madoff and also with regard to the SEC’s admissions of failure. We intended it to go out last night, but were given pause when we saw the leak of Obama’s pending appointment of Mary Shapiro to head the SEC. We thought about adding that to [...]

Why Madoff will not be an isolated case Over a year ago we questioned whether there was sufficient regulation of the Hedge Fund industry (click here to read).  In light of the Madoff Meltdown the important question brokers must be asking themselves now is not IF more regulation is necessary, but should one remove one’s clients’ [...]

Bernard Madoff. The ultimate zinger. Just say the words: Bernard Madoff -the whole room goes deathly silent. What can one say? What the hell was he thinking? At a moment when the entire world is looking for a reason to trust the US financial system, in rides Bernie Madoff. Former Chairman of the Nasdaq. Treasurer [...]

On November 15, leaders of 20 nations will convene to create a framework for stabilizing and rebuilding the world financial markets. The meeting is being called Bretton Woods II, after the historic meeting that set the stage for dollar hegemony after WWII. While the meeting is set to review and determine such things as the [...]

Breaking News: For Immediate Release  GOVERNMENT CONSIDERING LEGISLATION TO BAN ALL SELLING OF STOCKS UNTIL FURTHER NOTICE:  The Federal government has announced plans to prohibit individuals and institutions from selling their stock until further notice.  “This ban on selling stocks and only allowing buy orders should result in a higher stock market by years end” [...]

With the ban on short expired today, the market may be in for yet another wild ride as the market expresses it’s faith in the recent bailout in dollar terms. According to an article by Kevin McCoy in USA Today, here’s how some well known folks weighed in: Richard Baker, president of the Managed Funds [...]

by The SIPA Opinion The recent release by FINRA  to allow an all public arbitration system is apparently either the last step to allow the hounds known as the Bar association to completely conquer the brokerage industry or a last ditch effort by FINRA and the largest firms on the street to avoid some of [...]

… And I thought The Merger Was Supposed To Save Money? Proposed Rule Change to Amend NASD Rule 7001B to Adjust Percentage of Market Data Revenue Shared with FINRA/Nasdaq TRF Participants Financial Industry Regulatory Authority, Inc. (“FINRA”) (f/k/a National Association of Securities Dealers, Inc. (“NASD”)) is filing with the Securities and Exchange Commission (“SEC” or [...]

Proposed Rule Change to Adopt Rule 12905 of the Customer Code and Rule 13905 of the Industry Code to Permit Submissions to Arbitrators After a Case Has Closed Under Limited Circumstances Financial Industry Regulatory Authority, Inc. (?FINRA?) is filing with the Securities and Exchange Commission a proposed rule change to adopt Rule 12905 of the Code of [...]