Saturday, September 12, 2009

Are You Kidding Me?

This morning while reading the newspaper, my wife pointed out that there was a commercial on television talking about protecting investors with direction to a web site call My first thought was... "have we finally found something good for investors?" To my dismay, it is a re-direct to FINRA's web site. FINRA is the organization behind the failure to catch Bernie Madoff, though you would not know it based on what is going on right now.

Here is the problem with FINRA and their Broker/Check site. If you were a licensed FINRA registered representative and you had your securities licensed revoked more than two years ago, then you do not have to worry about being found on the FINRA Broker Check site. FINRA gladly removes your entire corrupt licensing history automatically for you. They gladly protect their bad apples with this process.

Now, when I and everyone who has ever had a FINRA license knows this, it is incomprehensible to me that FINRA would put up a re-direct web site call with the pretense of protecting investors. Are you kidding me? They are not protecting investors. They are protecting their former members with bad disciplinary histories.

Bernard Madoff and FINRA

Bernard L. Madoff was the name of his NASD broker/dealer before he changed the name to Bernard Madoff Investment Securities LLC on January 1, 2001. Bernard Madoff broker/dealers were registered as broker dealers with the NASD/FINRA from March 25, 1960 until they closed him down on June 17th, 2009, the official closure date. What I would like to see is who from FINRA visited Bernard Madoff Investment Securities, LLC as a regulatory and enforcement person during the last 15 years. Apparently, someone from the NASD visited him. In the enclosed FINRA Broker Check report, it shows disciplinary actions initiated by the NASD(FINRA's predecessor organization) on July 6, 2005, February 26, 2007, February 27, 2007 and August 27, 2008. As you can read in this report, the issue was related to quotes. Apparently, he was not submitting quotes to the stock exchange for all of these purchases he was doing. Couldn't these FINRA gurus ask themselves the question, "maybe he is not submitting quotes to the exchange because he is not really doing any trading."

I am deeply afraid that the 400 odd page report lambasting the SEC is what was put forward to keep the limelight off of FINRA. FINRA has made overtures publicly that they want to be the self regulatory organization for investment advisers and broker/dealers. They did such a good job with Bernard Madoff Investment Securities, LLC. I guess they think they earned it.