Obama’s revolving door--FINRA and SEC

I've written about Mary Shapiro before. There is no hope for change when the fox guards the henhouse. We'll continue to have the Bernie Madoff and "Sir" Allen Stanford scandals and ponzi schemes.

"Markopolos and the subcommittee members devoted much time to laying out the multitudinous and egregious failures of the SEC with respect to Madoff. During the questioning, Markopolos was asked his opinion of another regulatory entity that is supposed to be overseeing and policing the activities of a segment of the financial services industry—broker/dealers. This one is called the Financial Industry Regulatory Authority (FINRA). It is a non-governmental organization run by the broker/dealers (think: fox watching the henhouse), empowered by the U.S. Congress to do so. Its powers include arbitrating disputes between customers and their broker-dealer members, since aggrieved customers are not usually permitted access to the courts. Supposedly, the U.S. Congress oversees FINRA activities.

Now, Markopolos was asked to compare the SEC and FINRA. His answer was short and pithy: the SEC is incompetent; FINRA is corrupt.

President Obama had appointed one Mary Shaprio to be the new head of the SEC, replacing the clueless Christopher Cox. I also knew that Mary Shapiro's previous job was head of FINRA, where she was paid approximately $3 million per year, plus another $5-$25 million reward for her FINRA exit. So, we have here the chief of a corrupt regulatory body, being appointed to clean house at an incompetent regulatory body. She was unanimously confirmed by the U.S. Senate." Bob Gilbert quoted at Maggie’s Notebook

No bailout needed here for the abused client

Considering that SEC and FINRA moved not at all against Bernie Madoff despite their huge budgets and staff, despite tips he was running a ponzi scheme, I certainly stopped to ponder the justice of this rule violation for an architect:

Rule 2.104 Code of Ethics for architects states:

“Members shall not engage in conduct involving fraud or wanton disregard of the rights of others.”

The Complainant and his wife retained Mr. Alexieff to design and prepare construction documents for an addition to their house. During the time that the project was being designed and constructed, Mr. Alexieff failed to renew his architectural license in the state where he practiced and where the project was located.

The National Ethics Council ruled that Mr. Alexieff violated Rule 2.104 of the Code of Ethics by performing architectural services for the Complainant, including signing and sealing architectural drawings, without a valid architectural license. The Council concluded that the Complainant had a right to expect that the architect he retained was licensed and would maintain a current license throughout the duration of the project. The lapse in Mr. Alexieff’s architectural license was in wanton disregard of the Complainant’s rights because it created a high degree of risk that the Complainant would be adversely affected.

The Council imposed the penalty of a three-year suspension of membership on Mr. Alexieff. AIArchitect This Week, Dec. 19

He doesn't renew his license and gets a 3 year suspension of membership. Bernie must have dotted all the i's and crossed his t's in order to fool both the outgoing Cox (SEC) and incoming Schapiro (FINRA to SEC). Reminds me of the Democrats here in Ohio dumping on former Gov. Taft for a golf game, then appointing a bunch of crooks under Strickland, like the "plumbers" and Dann.

FINRA, Madoff, and Obama's SEC choice

"Mary Schapiro, Barack Obama's choice to lead the Securities and Exchange Commission, previously appointed one of Bernard Madoff's sons to a regulatory body that oversees US securities firms.

It has emerged that in 2001, Ms Schapiro, now the chief executive of the Financial Industry Regulatory Authority (FINRA), employed Mark Madoff to serve on the board of the National Adjudicatory Council - the division that reviews disciplinary decisions made by FINRA.

Last week, Mark and his brother, Andrew, were understood to have approached the authorities after their father apparently confessed to orchestrating a $US50 billion ($70.9 billion) securities fraud.

Bernard Madoff is under house arrest in his $US7 million Manhattan apartment and will be electronically tagged after he failed to secure further signatories to guarantee his $US10 million bail.

Both sons have emphatically denied any involvement in what could be the biggest fraud perpetrated by an individual.

However, the link with Mark may prove controversial for Ms Schapiro and the US president-elect, who has moved fast to replace Christopher Cox, the current head of the SEC.

The watchdog has already come under fire for failing to detect Mr Madoff's activities." Story link here, here, here, here and here.

In my opinion, her useless, ineffective term with FINRA who couldn't catch a thief if they stumbled over him unconscious, is a far more damning recommendation than her appointment of Madoff the Lesser. Makes no difference if she was in like flinn with Reagan and Bush and Clinton. She's much too tainted. FINRA and SEC both have to clean up the family tree and get rid of the incest.

Let's see. Obama's got a Secretary of State with huge financial obligations to the Saudis through her husband's library and foundation. He's got a Chief of Staff with fingerprints all over the Blagojevich appointment scandal. He's got a Secretary of Education that helped Bill Ayers with the Annenberg connection in the failing Chicago schools. Those three he knew about. This one probably caught him off guard. Gary Gensler who spent 18 years at Goldman Sachs, the ones who got a jump start on the bail outs in 2007, was under something in Treasury, he appointed to head Commodities Futures Trading Commission.

Sure is lots of hope and change coming our way folks.