Investor Alert | SEC Takes Notice of FINRA’s Lack of Focus

SEC publicly takes notice of FINRA’s lack of focus on fixing the big problems in the securities industry.

FINRA’s defense – that it goes after individual brokers hard – is the equivalent of saying it does half of its job well and that should be enough.   From my perspective, it appears that FINRA simply has no interest in biting the hand that feeds it – i.e. no interest in taking on the big Wall Street firms and other large broker-dealers in any significant way.   This perspective is supported by the small fines against big firms and the lack of fines against Wall Street executives by FINRA.

While we support FINRA’s efforts to pursue rogue brokers,  the large firm's misdeeds cause even more financial harm to investors collectively than all the individual rogue brokers combined.   FINRA needs to pursue large-scale wrongdoing by big firms and their executives with the same enthusiasm it has for chasing individual brokers who take advantage of client relationships.  While we are hopeful that pressure from the SEC will lead to this change, we are not counting on it.

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