FINRA Must Play By Its Own Rules

Will the pressure being applied on FINRA compel this Wall Street self-regulatory organization to open its books and records? I am heartened and hopeful that the complaint filed by Amerivet Securities against FINRA will do just that.

High five to RS for sharing this complaint, Amerivet Securities v. Financial Industry Regulatory Authority.

Amerivet requests FINRA open its books for purposes of reviewing FINRA’s (and the NASD’s) engagement, oversight, and investment activities broadly speaking.

My major axe with FINRA remains its liquidation of Auction-Rate Securities in 2007. I would ask the judge who is hearing the Amerivet complaint to review a September 2008 document produced by FINRA in regard to the Auction-Rate Securities debacle. I submit Testimony by Susan L. Merrill, Executive Vice-President, Chief of Enforcement, Concerning Auction-Rate Securities Markets to Committee on Financial Services U.S. House of Representatives September 18, 2008.

Ms. Merrill promotes that as part of FINRA’s investigation of the ARS market, it would also focus on:

possible conflicts of interest where a firm may have been in possession of knowledge about ARS failures and liquidated their proprietary ARS positions by selling those positions to customers or ahead of customer liquidations.

Ms. Merrill, Ms. Schapiro, Mr. Ketchum, and members of the House Committee on Financial Services, Sense on Cents calls on all of you to hold FINRA to the same standard you would apply to every bank, broker-dealer, and money manager involved in the Auction-Rate Securities market.

I can only hope the judge handling the Amerivet complaint is able to review Ms. Merrill’s testimony.

FINRA must release all information regarding the liquidation of ARS from its investment portfolio in 2007.

What is good for the goose is good for the gander.

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