News is leaking that Congress may be inclined to have Wall Street’s self-regulator, FINRA, gain oversight of the investment advisory industry. That industry is currently regulated by the SEC and operates under a fiduciary standard.
The industry is fighting tooth and nail NOT to be regulated by FINRA which regulates broker-dealers under the less stringent suitability standard.
While the investment advisory industry and FINRA are duking it out, let’s return to my initial questions. Do those in Congress know how to read? Do they open their mail? Why do I ask? Because none other than the Project on Government Oversight sent four separate committees on the Hill a letter on February 23, 2010 seriously questioning the validity of FINRA’s oversight of Wall Street and highlighting FINRA’s practices and failures.
The Project On Government Oversight (POGO) is writing to raise concerns that Congress’s efforts to reform the financial regulatory system have not adequately addressed the failures of the private self-regulatory organizations (SROs) that are tasked with protecting the investing public and maintaining the integrity of our financial markets. Specifically, we urge you to take a much closer look at the Financial Industry Regulatory Authority (FINRA)—an SRO that regulates thousands of securities brokerage firms—and to consider whether FINRA can ever be an effective regulator given its cozy relationship with the securities industry.
Sixteen months later, Congress ( NOW UNDER REPUBLICAN RULE) seemingly never seriously addressed the concerns raised by POGO, an independent government reform entity, BUT now our esteemed colleagues on the Hill seem poised to increase the FINRA footprint. Is this wise public policy? Is this the best America gets? Does this crowd on Capitol Hill really have any idea as to what has transpired in our economy and our markets? Or is the incestuous relationship between Wall Street and Washington just too strong?
No comments:
Post a Comment