Larry Doyle's Blog, page 10

The Fascinating Case of Louis and Donna Pitch v. Mark “Hollywood” Hotton and Oppenheimer and Co.

In a case that strikes at the core of so much that is wrong on Wall Street and the financial regulatory system (SEC and FINRA), Susan Antilla once again distinguishes herself by bringing real light to a regulatory arbitration system that much prefers to operate in darkness.

The following case might appear to be fodder for an episode of CSI but is all too real for a Long Island couple who were little more than prey for an unscrupulous broker who went largely unchecked both by his employer and the regulator charged with protecting the public from the likes of this scum.

Let’s navigate as Antilla writes Case Closed in Securities Dispute, Until New Evidence Is Uncovered:

A Long Island couple who lost $5 million at the hands of Mark C. Hotton, the former stockbroker notorious for defrauding Broadway producers, is arguing that his employer, Oppenheimer & Company, withheld critical evidence during an arbitration hearing and should be held liable.

Securities lawyers say that disputes over the production of evidence take place regularly and that the failure to turn over documents is an all-too-common problem in arbitrations. Rarer is a smoking-gun document that surfaces after the fact, as appears to be the case with Oppenheimer and Mr. Hotton.

Mr. Hotton made headlines in 2012 for defrauding the producers of the Broadway play “Rebecca” by collecting fees and commissions for lining up financing with an investor who did not exist. He pleaded guilty to money laundering and two counts of fraud last July and is being held in the Metropolitan Detention Center in Brooklyn, awaiting sentencing on May 9.

Separate from the “Rebecca” fraud, Mr. Hotton, who was known as “Hollywood” at his Oppenheimer branch, where he worked for a little more than three years, is accused of stealing millions of dollars from his brokerage clients. Despite a regulatory record of six- and seven-figure investor complaints against him, Mr. Hotton attracted no media attention until after he was accused of bilking about $60,000 from the “Rebecca” producers.

Two of his clients, Louis and Donna Pitch, filed a claim with the Financial Industry Regulatory Authority against Mr. Hotton and Oppenheimer in December 2009. Two days before the hearing was to begin in February 2011, Mr. Hotton filed for bankruptcy, leaving Oppenheimer as the sole respondent.

The arbitrators ruled early last year that the Pitches were entitled to recover only half of their losses. In the course of 69 hearings over 22 months involving the couple, Oppenheimer argued that it properly supervised Mr. Hotton, who worked at the firm from November 2005 to January 2009. The firm said in a post-hearing brief in December 2012 that there was no evidence that it had been negligent in hiring, investigating or retaining Mr. Hotton and that it properly supervised him in his dealings with the Pitches. Any claims about Mr. Hotton’s transgressions “came to Oppenheimer’s attention after he left,” the firm told Bloomberg News in October 2012.

That turned out to be false.

Five months after the arbitrators’ decision, the Pitches’ lawyer, Timothy J. Dennin of Northport, N.Y., opened a computer disk that was sent to him during the discovery phase of a separate case against Oppenheimer and found a letter from the Securities and Exchange Commission that discussed Mr. Hotton’s improper trading.

On Dec. 14, 2007, the S.E.C.’s Office of Compliance Inspections and Examinations had written to Oppenheimer’s chief compliance officer, Allen Holeman, to inform the firm that it had not properly supervised Mr. Hotton. He had traded improperly in 11 of his clients’ accounts, the agency said.

That evidence would have “completely demolished” the firm’s defense that it had not been aware of problems with Mr. Hotton, the Pitches said later. But the letter was not produced in 2010, after the Pitches requested “all documents, regulatory correspondence, and/or communications with the S.E.C.” concerning Mr. Hotton for the previous five years.

What does it say about the regulators, both the SEC and FINRA, when a firm such as Oppenheimer so brazenly defies a mandate to provide all documentation requested during a discovery phase?

Can you say “kangaroo court?”

Is Oppenheimer’s blatant disregard to provide the requested documentation in this case a one off? Anything but.

Securities lawyers say that disputes over discovery are a regular occurrence. The failure to produce documents “has always been a pervasive problem in Finra arbitrations,” said Jason Doss, president of the Public Investors Arbitration Bar Association, an association of lawyers who represent investors.

This case is far from over. What will FINRA do? Will it continue to allow the kangaroos to run wild through its arbitration process or might it actually try to do the right thing and hold Oppenheimer accountable?

An Oppenheimer lawyer, William E. Mahoney Jr., argued in a letter to Finra on Feb. 7 that it would be “clearly inappropriate” for Finra to take a fresh look at the Pitches’ case and asked the authority to decline their request for monetary sanctions, punitive damages and legal fees. But on March 24, Finra wrote to Mr. Mahoney to inform him that his request had been denied. On April 18, Oppenheimer filed a complaint in New York State Supreme Court, asking that the Pitches’ December 2013 request be dismissed.

Mr. Dennin said that he learned during a discussion with a Finra official this month that it had opened a preliminary inquiry into the Pitches’ complaint. A Finra spokeswoman, Michelle Ong, said that she could not comment on the existence of any inquiry but added that “we are aware of the allegations in this matter and are currently reviewing them.”

Sense on Cents will be watching closely. Will FINRA at long last start to do the right thing?

Do you think a mandatory more rigorous background check on the likes of “Hollywood” Hotton would have prevented this scum from operating in the first place?

Major props once again to Susan Antilla for bringing light into this dark corner of the Wall Street-Washington intersection. How many other individuals like “Hollywood” will continue to prey on investors? When penalties on outfits like Oppenheimer do not fit the crimes, little surprise that predatory practices and individuals continue to thrive.

The ball is in your court, Mr. Ketchum (FINRA CEO). Will you side with the American public in the personage of Louis and Donna Pitch or once again let the kangaroos run wild?

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Bill Moyers on the American Oligarchy

Prior to correcting a problem, one needs to identify and expose it. That said, bringing about real change is challenging when the interests of those charged with protecting and promoting the public interest are outweighed by their personal pursuits and willingness to trade their position for payoffs.

Make no mistake, this reality is ultimately a failure of leadership on so many levels. Bill Moyers offers a few minutes of cutting commentary on the growing presence of an American oligarchy.

The quid pro quo system of governance practiced by our elected officials and regulatory executives allows for a host of corruptible practices including a tax structure that does not advance our national interests, economic and otherwise.

Regrettably, though, this is the reality in which we currently live. The corruption, legal and illegal, are a burden on all of us but especially future generations.

What can we do about it?

Challenge your elected officials whenever possible to acknowledge the corruption within the system and what they will personally do about it.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Chris Whalen: True Perpetrators in Michael Lewis’ Tale of Wall Street Greed and Corruption Are Congress, SEC, FINRA, Major Exchanges

[image error]Today I am pleased to elevate author and investment banker Chris Whalen into the highest echelon of the Sense on Cents Hall of Fame.

Whalen distinguishes himself as he properly frames the ongoing debate surrounding the scandalous practices within high frequency trading in a recent commentary that ran at Zero Hedge entitled, In “Flash Boys” Michael Lewis Misses the Point — Deliberately.

Let’s navigate as Whalen further exposes how our public officials and regulators charged with protecting the public interest are really “in bed with Wall Street.”

Whalen outlines,

All of the strategies used in HFT are not only legal, but they are the result of extensive rule making and public hearings by Congress, the Securities and Exchange Commission, FINRA and the major exchanges. So while Lewis is right to say that these strategies “screw” retail customers in a practical sense, the fact is that the activity has been entirely blessed by Congress, regulators and the major exchanges . . . structural duplicity is programmed into the system.

The question begs who was truly representing the public interest when systems and practices were developed and implemented that allowed for the legal ‘screwing’ of retail customers. Whalen continues and nails the real cause behind the symptomatic injustice that is embedded within high frequency trading activity:

. . .  the real scandal is that all of this has been entirely blessed by the SEC, FINRA and the major exchanges . . .   the crime of HFT is that Congress, the SEC and other regulators have allowed a handful of Wall Street firms to assemble a set of opaque market rules that few people understand.

Whalen trashes the presumption that Congress and our financial regulators actually protect the public interest. How and why do you think this ‘scandal’ and ‘crime’ happen? Because Congress and the regulators are getting paid to do so. The payola comes in the form of massive campaign contributions and lobbying funds and a spin through the revolving door to a high paying job in the industry. Those on the outside would define these practices as corruption. Those on the inside of these rackets would define them as ‘business as usual.’

Whalen concludes,

We should thank Michael Lewis for using his celebrity and considerable writing skills to draw attention to this issue of HFT, but “Flash Boys” incorrectly demonizes individual traders and firms.  Lewis “Puts a Face on HFT,”but in doing so misses the real point of the problem.

The true perpetrators in Michael Lewis’ tale of Wall Street greed and corruption are, in order of complicity, the US Congress, the SEC, FINRA and major exchanges.

I fully concur.

Can you say, “In Bed with Wall Street?”

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

 

Clinton Presidential Documents c.1998: “Who’s on First?”

[image error]Every now and then I come across a document or statement that simply stops me in my tracks. In the process of pondering the weight and importance of the embedded message, I am typically left totally aghast.

Today I had one of those experiences as I continued to review the treasure trove of material in the recently released documents from the Clinton Presidential Library. From a document covering the work of the Council of Economic Advisers, I almost spilled my coffee when I read the following:

There is a case for a lender of last resort in catastrophic cases (Greenspan.)

Uncle Alan effectively acknowledges the ‘too big to fail’ problem all the way back in 1998 when we experienced the meltdown of the hedge fund Long Term Capital Management.

Improved capital standards–Capital standards are seriously broken. We need to improve measurement of risk and capital so that banks have adequate capital against the risks they run.

Be mindful that at this point in time Wall Street firms were supposed to be able to leverage themselves at a maximum of 12 to 1. Even by that standard, this document is highlighting that the President’s advisers felt that capital standards were not sufficient. Fast forward 6 years and those capital standards were eroded so Wall Street firms could triple their leverage.

You can’t make this stuff up.

They then asked themselves the following:

. . .  should we address leverage in the system?

If I were not reading a document from a presidential library, I may have been confused to think I was reading a script from an Abbott and Costello skit when I see how the advisers answered this question regarding leverage:

We should not address leverage per se, because it is too difficult to define given derivatives and is not the proper measure of the problem. We should control excessive exposure to risk.

Let’s see here. Leverage is too difficult to define given the unknown risks lurking within the derivatives markets, but there is a need to control excessive exposures to risk.

Huh? What? “Who’s on first??”

Is it any wonder that the big money interests on Wall Street were able to ply their trade and fill the coffers of those in Washington to relax the net capital standards and triple their leverage in the process? We still pay the price for that “rigging” of the system and so much more.

What do you think?

As far as I am concerned, in assessing who is minding our national interests in Washington, “Who’s” still on first. “What’s” still on second. “I dunno’s” still on third.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Clinton Presidential Documents on Glass-Steagall Repeal: No Good Reason For Doing This

[image error]I do not think there is any single piece of legislation in the last 50 years that has had such a profoundly detrimental impact on the American public than the repeal of the Glass-Steagall Act separating commercial and investment banking.

That repeal is certainly not the sole factor that led to the economic crisis of 2008 and the ongoing pain we experience today, but it was certainly critical to the eventual meltdown. There is no great revelation in that assessment.

The recent release of documents from the Clinton Presidential Library provides real transparency on the dynamic at play back in the mid to late ’90s that led to the eventual dismantling of Glass-Steagall. Perhaps no surprise that we have yet to see meaningful review of these documents from media outlets on our side of the pond, but the UK-based The Guardian hits these revealing documents hard.

Not that we did not already know that the Clinton administration ushered in the repeal of Glass-Steagall, but we learn some fascinating facts in reviewing both some of the documents and The Guardian’s commentary.  Let’s navigate and see who was really calling the shots:

Wall Street deregulation, blamed for deepening the banking crisis, was aggressively pushed by advisers to Bill Clinton who have also been at the heart of current White House policy-making, according to newly disclosed documents from his presidential library.

The previously restricted papers reveal two separate attempts, in 1995 and 1997, to hurry Clinton into supporting a repeal of the Depression-era Glass Steagall Act and allow investment banks, insurers and retail banks to merge.

The White House papers show only limited discussion of the risks of such deregulation . . . Earlier, in February 1995, newly-appointed Treasury secretary Robert Rubin, his deputy Bo Cutter and senior advisers including John Podesta gave the president three days to decide whether to back a repeal of Glass-Steagall.

Podesta currently works at the White House as special adviser to President Barack Obama. Sperling stood down as director of Obama’s National Economic Council last month.

Along with Cutter, who worked on Obama’s transition committee, all three men were close allies of Rubin, who spearheaded the deregulation of Wall Street before joining the board of Citigroup in 1999. In 2007, he briefly became its chairman.

The closeness of Obama’s team to the deregulation policies of the late 1990s is well known and has been criticised by campaigners as a reason for the current administration’s reluctance to institute more aggressive Wall Street reforms after the banking crash.

But the new documents cast fresh light on the way the White House was first ushered toward deregulation by the tight group of Rubin allies.

A similar apparent attempt to rush president Clinton’s decision-making occurred later in the process, in 1997.

In a letter received by the president on 19 May, Clinton is again given just three days to decide whether to proceed with the deregulation agenda.

While Rubin, Podesta, Sperling, Cutter et al were clearly doing the ultimate bidding of their Wall Street cronies as this repeal worked its way through Congress, a review of a document dated September 2, 1998 is chilling in highlighting one specific point in regard to the repeal of this act:

There is no good reason for doing this. It does not help safety and soundness, and is not necessary for functional regulation.

If in fact there was “no good reason for doing this” — and history has certainly proven that to be an accurate assessment — then how much dough-re-me went into the pockets and campaign coffers of Clinton and others to see that Glass-Steagall was repealed? We know Rubin himself was paid over $100 million by Citigroup.

Is there any doubt that our nation would be far better off if Glass-Steagall had never been repealed? I have no doubt about that, which is why I am a strong proponent that it be reinstated and we break up the large Wall Street banks in the process.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

SEC Failures in Systems and Controls: Matter of National Security

[image error]As I sit here collecting my thoughts in the early morning hours of April 18, 2014, I think back to the chilling days of February 26, 1993 and September 11, 2001.

Most reading this will certainly never forget the tragedy that is forever known as 9-11. However, that fateful day was foreshadowed 8 years prior when another World Trade Center bombing took place. Both attacks were clear-cut indications that terrorist forces were at work to assault American interests by massively disrupting activity on Wall Street. We live with this reality each and every day knowing that these same forces remain at work.

After the attack of 1993, Wall Street firms began implementing significant measures for disaster recovery programs and information systems controls. Against that 20 plus year backdrop, I have to admit I am bewildered if not totally dismayed this morning. Why so? Stick with me here. 

I just read a recently released report from the General Accounting Office entitled SEC Needs to Improve Controls Over Financial Systems and Data.

If this report is not a scathing indictment of the leadership of former SEC chair Mary Schapiro specifically and those who preceded her as well (Chris Cox, William Donaldson, Harvey Pitt, and Arthur Levitt), I do not know what is. Recall that on February 4, 2009, Madoff whistleblower Harry Markopolos impugned the SEC as deserving of an A+ in incompetence. After reading this report, I can more fully understand and appreciate Harry’s assessment. Let’s navigate.

What GAO Found

Although the Securities and Exchange Commission (SEC) had implemented and made progress in strengthening information security controls, weaknesses limited their effectiveness in protecting the confidentiality, integrity, and availability of a key financial system. For this system’s network, servers, applications, and databases, weaknesses in several controls were found, as the following examples illustrate:

1. Access controls: SEC did not consistently protect its system boundary from possible intrusions; identify and authenticate users; authorize access to resources; encrypt sensitive data; audit and monitor actions taken on the commission’s networks, systems, and databases; and restrict physical access to sensitive assets.

2. Configuration and patch management: SEC did not securely configure the system at its new data center according to its configuration baseline requirements. In addition, it did not consistently apply software patches intended to fix vulnerabilities to servers and databases in a timely manner.

3. Segregation of duties: SEC did not adequately segregate its development and production computing environments. For example, development user accounts were active on the system’s production servers.

4. Contingency and disaster recovery planning: Although SEC had developed contingency and disaster recovery plans, it did not ensure redundancy of a critical server.

The information security weaknesses existed, in part, because SEC did not effectively oversee and manage the implementation of information security controls during the migration of this key financial system to a new location. Specifically, during the migration, SEC did not (1) consistently oversee the information security-related work performed by the contractor and (2) effectively manage risk.

In my opinion, these glaring deficiencies rise to the level of a serious matter of national security. What does the GAO recommend?

GAO is recommending that SEC take two actions to (1) more effectively oversee contractors performing security-related tasks and (2) improve risk management. In a separate report for limited distribution, GAO is recommending that SEC take 49 specific actions to address weaknesses in security controls. In commenting on a draft of this report, SEC generally agreed with GAO’s recommendations and described steps it is taking to address them.

The larger question begs, though, how does this happen? In thinking about this question, I reflect on the woefully incomplete and improper vetting of Ms. Schapiro to be the head of the SEC. This GAO report strikes me as clear-cut evidence that Ms. Schapiro should not have been our nation’s top financial cop.

Additionally, this report also strikes me that those atop Capitol Hill charged with protecting the public interest by making sure that we have the right leadership in place for positions such as the commissioner of the SEC have also massively failed our nation.

But we already knew that.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

FINRA Broker Check: Watch Your Wallet, Folks

Of all the questions facing investors these days, I would think two of the most important are: (1) with whom are you doing business? (2) how much are you paying for the investment product being pitched to you?

Watch this 6-minute clip and you will understand why I write at length, both at my blog and in my book, on the need for real transparency on Wall Street and especially within the regulatory system so as to help people avoid the perils and pitfalls that inevitably come their way when unsavory characters call on them.

Watch the latest video at video.foxbusiness.com

I touched on this topic a few weeks back to expose the fact that Wall Street’s self-regulatory organization FINRA allowed close to 97% of the data on its Broker Check system to be “expunged” over a two and a half year period (mid-2009 to late 2011).

What might they have allowed the industry to hide in doing so? Even the host takes a less than subtle shot at FINRA in this segment.

Watch your wallet, folks.

Navigate accordingly.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Sharyl Attkisson: Death of Investigative Journalism

[image error]What does it say about a nation when a highly respected investigative journalist speaks out that she is compelled to leave her place of employment because her voice and her stories are not being given air time?

I do not know about you but that tells me the money and power behind the forces at work to keep the truth from the public are only getting that much stronger. Make no mistake, that money and that power are working for interests on both ends of the political spectrum and their friends doing their bidding on both sides of the aisle.

Given her willingness to depart CBS News and speak out on this corrosive reality within our media today, I welcome immediately inducting Sharyl Attkisson into the Sense on Cents Hall of Fame. What she has to say regarding media bias may not be surprising but it should trouble to no end all who care about a free and democratic society. 

I thank the regular reader who shared this brief commentary from The Independent Sentinel (w/an embedded 13 minute video clip):

Sharyl Attkisson, appearing on Howard Kurtz’ show, said that in the last couple years, there is much less interest in original, investigative reporting. CBS, in her recent experience, doesn’t seem to want to ruffle feathers of politicians, corporate interests, et al.

She said it was easy for her to leave CBS because they didn’t leave her much to do. Other reporters feel the same way about the reporting at CBS and other networks, Attkisson said.

The powers that be never say they won’t run the stories, they let the story die. It’s a death by a thousand cuts.

The press, she said, is very shy about challenging this administration as if they are making some kind of political statement instead of doing their job.

That should come as no surprise to anyone. Journalism is dead, sacrificed to the cause of statism and not ruffling any feathers.

I have personal experience in bringing stories with real impact to major media outlets only to be told that management will not allow the reporters to pursue them. That is wrong on so many levels but it is the world in which we live currently. The issues that go largely unaddressed by major outlets certainly run the gamut in terms of industry. Who pays the price for this lack of transparency? We all do.

Where do I go to learn information that the media keeps repressed? To sites such as the Project on Government Oversight, Transparency International, Government Accountability Project, and other sites to which I link under the Watchdog heading in the right hand sidebar of this blog. We need more sites such as these and more people like Attkisson, Charles Lewis, and Matt Taibbi. Speaking of Matt, he just joined a recently launched initiative, First Look Media:

Founded by Pierre Omidyar, the organization will pursue original, independent journalism that is deeply reported and researched, thoroughly fact checked, and beautifully told. We are driven above all by a belief that democracy depends on a citizenry that is not just highly informed, but deeply engaged.

I fully concur.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Book Review: Is Wall Street Rigged? “Michael Lewis Is Just Scratching The Surface”

I appreciate anybody who takes the time and makes the effort to read and review my book, In Bed with Wall Street.

That said, I deeply appreciate those who in reading my book really seem to “get it” and are then willing to lay it on the line in “delivering it” in their review. On that note, Mark Melin of ValueWalk goes to the front of  the class.

Melin dives deeply into the material. I give him credit for reaching out to Wall Street’s self-regulator FINRA to get their take on some of my hard hitting charges detailed in the book. In regard to my long held assertion that FINRA engaged in insider trading in its liquidation of ~$650 million of auction-rate securities, a FINRA spokesperson commented to Melin: 

“FINRA sold its ARS investments more than six months before the market started becoming unstable.”

Let’s juxtapose that statement reported by Melin with one put forth by a FINRA spokesperson and highlighted in a Bloomberg commentary from April 2009:

Finra, responsible for educating and protecting investors, owned as much as $862.2 million of the debt before exiting the market in the spring of 2007, less than six months before auctions began to fail, according to spokesman Herb Perone.

Let’s see here. “More than six months” says one FINRA spokesperson in April 2014. While another one had asserted “less than six months” in April 2009.

You cannot make this stuff up folks.

So was FINRA misrepresenting the little they have shared with the public on this ARS liquidation then or are they misrepresenting now? Would they be willing to go under oath on this topic? Perhaps they might embrace a little bit of transparency and open their books and records to an independent outside audit so we can learn the truth.

Does FINRA care that there remain countless numbers of ARS investors still unable to fully access their cash from these supposed ‘cash-equivalent’ securities a full six-plus years after this market segment froze?

In his concluding remarks, Melin references the great work of renowned writer Michael Lewis and his recent book. I am gratified for obvious reasons by Melin’s statement:

Michael Lewis has accused Wall Street of being “rigged,” but he’s really just scratching the surface, as Doyle outlines in this excellent book.

Lewis sets the standard for all financial writers. I am currently reading his book Flashboys and thoroughly enjoying it. But I view high frequency trading and other forms of manipulation within a wide array of market segments as mere symptoms of the current Wall Street-Washington dynamic. What is the cause? As recently retired SEC attorney James Kidney laid out in his retirement  remarks, those running the SEC (and in my opinion FINRA, as well) are operating “little more than a tollbooth on the bankster turnpike.” In other words, the regulatory system is replete with executives who are incompetent, captured, and/or corrupted.

Book Review: Book Accuses FINRA of Insider Trading In Its $2 Billion Portfolio.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

Please subscribe to all my work via e-mail.

The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

Book Review: Is Wall Street Rigged? “Michael Lewis Just Scratching The Surface”

I appreciate anybody who takes the time and makes the effort to read and review my book, In Bed with Wall Street.

That said, I deeply appreciate those who in reading my book really seem to “get it” and are then willing to lay it on the line in “delivering it” in their review. On that note, Mark Melin of ValueWalk goes to the front of  the class.

Melin dives deeply into the material. I give him credit for reaching out to Wall Street’s self-regulator FINRA to get their take on some of my hard hitting charges detailed in the book. In regard to my long held assertion that FINRA engaged in insider trading in its liquidation of ~$650 million of auction-rate securities, a FINRA spokesperson commented to Melin: 

“FINRA sold its ARS investments more than six months before the market started becoming unstable.”

Let’s juxtapose that statement reported by Melin with one put forth by a FINRA spokesperson and highlighted in a Bloomberg commentary from April 2009:

Finra, responsible for educating and protecting investors, owned as much as $862.2 million of the debt before exiting the market in the spring of 2007, less than six months before auctions began to fail, according to spokesman Herb Perone.

Let’s see here. “More than six months” says one FINRA spokesperson in April 2014. While another one had asserted “less than six months” in April 2009.

You cannot make this stuff up folks.

So was FINRA misrepresenting the little they have shared with the public on this ARS liquidation then or are they misrepresenting now? Would they be willing to go under oath on this topic? Perhaps they might embrace a little bit of transparency and open their books and records to an independent outside audit so we can learn the truth.

Does FINRA care that there remain countless numbers of ARS investors still unable to fully access their cash from these supposed ‘cash-equivalent’ securities a full six-plus years after this market segment froze?

In his concluding remarks, Melin references the great work of renowned writer Michael Lewis and his recent book. I am gratified for obvious reasons by Melin’s statement:

Michael Lewis has accused Wall Street of being “rigged,” but he’s really just scratching the surface, as Doyle outlines in this excellent book.

Lewis sets the standard for all financial writers. I am currently reading his book Flashboys and thoroughly enjoying it. But I view high frequency trading and other forms of manipulation within a wide array of market segments as mere symptoms of the current Wall Street-Washington dynamic. What is the cause? As recently retired SEC attorney James Kidney laid out in his retirement  remarks, those running the SEC (and in my opinion FINRA, as well) are operating “little more than a tollbooth on the bankster turnpike.” In other words, the regulatory system is replete with executives who are incompetent, captured, and/or corrupted.

Book Review: Book Accuses FINRA of Insider Trading In Its $2 Billion Portfolio.

Larry Doyle

Please order a hard copy or Kindle version of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy.

For those reading this via a syndicated outlet or by e-mail or another delivery, please visit the blog to comment on this piece of ‘sense on cents.’

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The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.