Tuesday, January 18, 2011

From Defending to Policing Wall Street

By Ben Protess @ DealBook. 
“They missed a lot of serious problems while picking on issues that are not important in the scheme of things,” said Joseph Mays Jr., a former examiner at Finra’s predecessor, who currently advises small broker-dealers on regulatory matters.
So Mr. Bennett must try to repair the regulator’s reputation just when its authority may be expanding. Finra — formed in 2007 when the National Association of Securities Dealers merged with the New York Stock Exchange’s regulatory arm — may soon be charged with overseeing tens of thousands of investment advisers, on top of the 600,000-plus brokers already under its purview. Finra is lobbying the Securities and Exchange Commission to get this power.
But the regulator’s harshest critics contend it has not earned this added responsibility. At the height of the financial crisis in 2008, Finra filed 1,073 disciplinary actions, down from 1,204 two years before. Last year, Finra brought 1,310 cases, but levied $41 million in fines, roughly half what it collected in 2006.
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