The Blog Of The Securities Industry Professional Association


  Brokers Beware   With each passing year retired Americans have felt the squeeze of the artificially lowered interest rates that have been crippling this country without so much as a whimper from AARP and its lobbyist friends.  Years ago, many Americans would work their whole life and save up a couple hundred thousand and […]

A Reminder for Small BDs Facing FINRA Fines: Size Matters

 Last month, FINRA reported two unrelated settlements of disciplinary actions against member firms noting its imposition of lower fines after taking into consideration, among other things, each firm’s limited revenues and financial resources.  Indeed, FINRA reported 13 similar settlements in 2012.  Back in 2006, NASD modified the General Principles Applicable to All Sanction Determinations portion […]
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Broker Protection Reform Needed

Its time to protect the reps from theft  On a monthly basis it seems we read another story about how the owner of a B/D shut his doors, filed a BD withdrawal and then decided to keep last month’s entire production and not pay out their brokers.  In a recent case a Firm owner from […]
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A New Way to Steal Client Money

How FINRA and Merrill Lynch now define theft   Every month I peruse the monthly disciplinary actions for two reasons. First to see what the trend of actions currently is and secondly to see if I know any of the firms or people who are being named.  This month was no different but one case in […]
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Lessons learned in 2011

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 […]
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Ken Norensberg for FINRA Board

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.
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FSX and SIPA give back to New Orleans

Our project, is to help rebuild homes and lives in the St. Bernard Parish. We are asking you to give a day to make a difference. No skills required. Simply register to attend the conference, and indicate you are interested in volunteering to help rebuild homes and lives. There will be a reception for volunteers Tuesday evening, in addition, FSX will pay for Tuesday evening hotel accommodations.
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Big changes coming for SIPA

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.
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Small Firms Claim FINRA Targets Them

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.
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Diary of a District Committeeman

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.
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Costs for small and large firms could soar

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
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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!
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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?
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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…
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SIPA Members Sweep FINRA Elections!

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.
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A Tale of Two Trades

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.
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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.
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Goldman takes one for the Team

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.
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Things That Make You Go Hmmmmmm??

Rants and raves from the SIPA C & C music factory had a whole generation of people uttering these now famous words back in the 1990’s. As we review some of the changes that are occurring right before our eyes with the financial system, its apparent that there is more confusion then ever before instead […]
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Gunn Allen And Investor Protections

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.
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Financial Reform Or Fairy Tale?

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?
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When Merrill Lynch Speaks. The D.A. Listens

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.
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Lessons Learned In 2009 ?

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.
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The Truth Is In The Pudding

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”.
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I Come to Bury FINRA, Not to Praise her

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!
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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 […]


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 […]
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“Failed” Regulation??

How To Insult The American Public With A Smile On Your Face Today the SEC Chairman Christopher proclaimed that “ The SEC Failed to Investigate and Probe Madoff”.  (Click here to read story). While this might sound to some of you as a small act of contrition and public acknowledgement of his agency’s failings, this […]

Hedge Fund Mess Just Beginning To Come Home To Roost

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’ […]
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The End Of FINRA: Dec 5, 2008

In several articles earlier this year, we broached the unthinkable: that the End Of FINRA was potentially at hand. Since then, we have seen much in the way of de-facto re-organization, with the Bulge Bracket firms – such as they still exist – coming under direct control of the Treasury. Ironically, what this means is […]

The Definition Of Insanity

Today is a very sad day on Wall Street. Lehman Brothers (LEH) has declared Bankruptcy and Merrill Lynch ( MER) has been bailed out in a fire sale to Bank of America. Two of the most well known names in Wall Street history have flamed out within a matter of moments and American investors have been shaken to their core. How could this all happen so quickly and how in the world did these two titans of Wall Street get into this mess to begin with
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A funny thing happened on the way to the Ball

The Demise of Wall Street's elite firms could reshape Regulation. The sudden and shocking demise of the Wall Street elite has left an industry in shambles and the American investor in jitters. The collapse of the largest names on Wall Street is being felt all across the world and has caused the Political landscape to suddenly pay more attention to the Economy and less attention to Governor Palin's "my space page". President Bush cancelled his fund raising campaign drive and Barrack Obama is already running commercials blaming the Republicans, while lost in all this is John McCain's suggestion that "Chairman Cox should be fired for betraying the public trust and falling asleep at the wheel"
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