Comments on: Now It’s Official: Securities Industry Regulator Takes Care of Self, Not Investors http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html Sun, 22 Nov 2009 19:08:53 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Larry Doyle http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46735 Larry Doyle Fri, 08 May 2009 18:39:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46735 I have been writing about the FINRA-ARS fiasco since late January. I initially wrote, "Let's Really Question Ms. Schapiro” on January 16, 2009 (http://www.senseoncents.com/2009/01/let’s-really-question-ms-schapiro…/). In this piece, I unearth the fact that FINRA had hundreds of millions invested in ARS, hedge funds, fund of funds, and private equity via their most recent Annual Report. I have continued to write extensively on this topic while working with Bloomberg who further investigated and reported this news on April 29th (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aw2KlsKy8pcE). I am, in fact, quoted in Bloomberg’s article. With all due respect to Mr. Solin, he must have picked up the Bloomberg story but does not properly attribute their work. <br /> <br />After the Bloomberg story, I wrote "FINRA Is Supposed to Police the Market" (http://www.senseoncents.com/2009/04/finra-is-supposed-to-police-the-market/) which explores the Bloomberg story, as well as provides a link to my comprehensive piece on the FINRA-ARS scandal, “Does the Palace Guard Have No Clothes?” (http://www.senseoncents.com/2009/04/does-the-palace-guard-have-no-clothes/).<br /> <br />In my humple opinion, the links to my posts at Sense on Cents lay out all the info and the questions that still need to be answered by FINRA and Ms. Schapiro. I launched my blog, Sense on Cents, in February and previously wrote at NoQuarter, where I am still a contributing writer.<br /> <br />Happy to chat if you'd like as this story is spreading rapidly. I worked on the street for 23 yrs trading and selling MBS. Finished as National Sales manager for Securitized Products at JPM in 2006.<br /> <br />Larry Doyle<br />http://www.senseoncents.com/about I have been writing about the FINRA-ARS fiasco since late January. I initially wrote, "Let's Really Question Ms. Schapiro” on January 16, 2009 (http://www.senseoncents.com/2009/01/let’s-really-question-ms-schapiro…/). In this piece, I unearth the fact that FINRA had hundreds of millions invested in ARS, hedge funds, fund of funds, and private equity via their most recent Annual Report. I have continued to write extensively on this topic while working with Bloomberg who further investigated and reported this news on April 29th (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aw2KlsKy8pcE). I am, in fact, quoted in Bloomberg’s article. With all due respect to Mr. Solin, he must have picked up the Bloomberg story but does not properly attribute their work.

After the Bloomberg story, I wrote "FINRA Is Supposed to Police the Market" (http://www.senseoncents.com/2009/04/finra-is-supposed-to-police-the-market/) which explores the Bloomberg story, as well as provides a link to my comprehensive piece on the FINRA-ARS scandal, “Does the Palace Guard Have No Clothes?” (http://www.senseoncents.com/2009/04/does-the-palace-guard-have-no-clothes/).

In my humple opinion, the links to my posts at Sense on Cents lay out all the info and the questions that still need to be answered by FINRA and Ms. Schapiro. I launched my blog, Sense on Cents, in February and previously wrote at NoQuarter, where I am still a contributing writer.

Happy to chat if you'd like as this story is spreading rapidly. I worked on the street for 23 yrs trading and selling MBS. Finished as National Sales manager for Securitized Products at JPM in 2006.

Larry Doyle
http://www.senseoncents.com/about

]]> By: Larry Doyle http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46666 Larry Doyle Thu, 07 May 2009 16:35:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46666 Mr. Solin got this info from a Bloomberg story last week but does not provide proper attribution.<br /><br />I have been writing about FINRA-ARS angle for three months, brought the news to Bloomberg who investigated and reported it last week. <br /><br />If you want the ENTIRE story please read, <br /><br />FINRA Is Supposed To Police The Market<br /><br />http://www.senseoncents.com/2009/04/finra-is-supposed-to-police-the-market/<br /><br />In addition to FINRA's investment in ARS, <br />they have/had hundreds of millions invested in hedge funds, fund of funds, and private equity. Mr. Solin got this info from a Bloomberg story last week but does not provide proper attribution.

I have been writing about FINRA-ARS angle for three months, brought the news to Bloomberg who investigated and reported it last week.

If you want the ENTIRE story please read,

FINRA Is Supposed To Police The Market

http://www.senseoncents.com/2009/04/finra-is-supposed-to-police-the-market/

In addition to FINRA’s investment in ARS,
they have/had hundreds of millions invested in hedge funds, fund of funds, and private equity.

]]> By: Hugh http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46597 Hugh Wed, 06 May 2009 18:48:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46597 Re fees on stock trades, I agree with LeeAnne. Whenever someone doesn't like some specific regulation or constraint, the argument always is that this business will flee and go somewhere else. After the meltdown though, you have to wonder where that somewhere else might be. Greater not less regulation seems to be the paradigm in world markets.<br /><br />The other thing to keep in mind is that a lot of market volume is generated by a relatively small number of players. Do these volumes serve any useful purpose? Do they increase market clarity or do they distort market pricing? <br /><br />We have seen the results of unrestrained speculation. Why should we not wish to dampen it, and isn't adding a volatility tax through increased fees (that could go to the government) a means of doing this? Re fees on stock trades, I agree with LeeAnne. Whenever someone doesn’t like some specific regulation or constraint, the argument always is that this business will flee and go somewhere else. After the meltdown though, you have to wonder where that somewhere else might be. Greater not less regulation seems to be the paradigm in world markets.

The other thing to keep in mind is that a lot of market volume is generated by a relatively small number of players. Do these volumes serve any useful purpose? Do they increase market clarity or do they distort market pricing?

We have seen the results of unrestrained speculation. Why should we not wish to dampen it, and isn’t adding a volatility tax through increased fees (that could go to the government) a means of doing this?

]]> By: Hugh http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46596 Hugh Wed, 06 May 2009 18:19:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46596 I'm with Francois on this. <br /><br />Mary Schapiro was a really awful pick to head the SEC. She was chosen precisely because she was seen as a non-confrontational, business friendly figure. Now even in the best of times this really would not be the kind of person you would want to be a serious regulator but after the financial meltdown it was as cynical as it was absurd. Let us remember that she was at FINRA and its predecessor in a senior position since 2002 and ran it from 2006 until she went to the SEC this year. <br /><br />Like Geithner at the New York Fed she had a ringside seat to all the speculative fever, bubbles, and collapses and yet seemed to miss the dangers and reacted feebly if at all to the messy aftermath.<br /><br />So some funny insider trading went on at FINRA. Given Schapiro's rep as a lax regulator, can any of us be surprised? I’m with Francois on this.

Mary Schapiro was a really awful pick to head the SEC. She was chosen precisely because she was seen as a non-confrontational, business friendly figure. Now even in the best of times this really would not be the kind of person you would want to be a serious regulator but after the financial meltdown it was as cynical as it was absurd. Let us remember that she was at FINRA and its predecessor in a senior position since 2002 and ran it from 2006 until she went to the SEC this year.

Like Geithner at the New York Fed she had a ringside seat to all the speculative fever, bubbles, and collapses and yet seemed to miss the dangers and reacted feebly if at all to the messy aftermath.

So some funny insider trading went on at FINRA. Given Schapiro’s rep as a lax regulator, can any of us be surprised?

]]> By: wintermute http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46595 wintermute Wed, 06 May 2009 18:13:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46595 No LeeAnne - I am 100% behind investor protection. The problem is not one of lack of regulation - it is one where hundreds of regulations exist - but are selectively enforced or not at all. Basically there is an inverted pyramid. The smallest investor is most stringently regulated - the largest banks, primary dealers, get away with blue murder. Regulation is massively failing in Western markets to the detriment of the small investor, the 401k holder, the worker who wants his or her money to work for them. <br /><br />Please do read a few of Karl Denninger's articles. He is superbly informed and daily takes the government, treasury, fed and congress to task about failed regulation and unenforced financial laws. <br /><br />e.g.<br /><br />http://market-ticker.denninger.net/archives/2009/05/04.html No LeeAnne – I am 100% behind investor protection. The problem is not one of lack of regulation – it is one where hundreds of regulations exist – but are selectively enforced or not at all. Basically there is an inverted pyramid. The smallest investor is most stringently regulated – the largest banks, primary dealers, get away with blue murder. Regulation is massively failing in Western markets to the detriment of the small investor, the 401k holder, the worker who wants his or her money to work for them.

Please do read a few of Karl Denninger’s articles. He is superbly informed and daily takes the government, treasury, fed and congress to task about failed regulation and unenforced financial laws.

e.g.

http://market-ticker.denninger.net/archives/2009/05/04.html

]]> By: LeeAnne http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46593 LeeAnne Wed, 06 May 2009 17:31:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46593 wintermute,<br /><br />"Problem with taxes on stock trades is that global exchange competition is so high with the internet and DMA that liquidity can move to other jurisdictions fast."<br /><br />is this not the reason given for the dismantling of all investor protecitonlaws and regulation? wintermute,

“Problem with taxes on stock trades is that global exchange competition is so high with the internet and DMA that liquidity can move to other jurisdictions fast.”

is this not the reason given for the dismantling of all investor protecitonlaws and regulation?

]]> By: VV111y http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46588 VV111y Wed, 06 May 2009 16:25:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46588 Awesome post. Thanks Yves. <br />Actually I need to thank you for all the other awesome posts too... Awesome post. Thanks Yves.
Actually I need to thank you for all the other awesome posts too…

]]> By: Ricochet Smith http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46587 Ricochet Smith Wed, 06 May 2009 16:22:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46587 wintermute 10:36<br />AMEN<br />How can the investing public be "protected" when the watchdogs have $3B available for investment? Who chartered this with this kind of conflict of interests.<br />Get the fox out of the henhouse. Where are Frank and Dodd when we really need them??? wintermute 10:36
AMEN
How can the investing public be “protected” when the watchdogs have $3B available for investment? Who chartered this with this kind of conflict of interests.
Get the fox out of the henhouse. Where are Frank and Dodd when we really need them???

]]> By: wintermute http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46586 wintermute Wed, 06 May 2009 16:00:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46586 All stock trades are already taxed. It is called the SEC fee and is applied to sell sides. Currently set at about $25 per million consideration. Was this level for many years ($25-35$) and dropped sharply to $7 and was recently increased again.<br /><br />Problem with taxes on stock trades is that global exchange competition is so high with the internet and DMA that liquidity can move to other jurisdictions fast. All stock trades are already taxed. It is called the SEC fee and is applied to sell sides. Currently set at about $25 per million consideration. Was this level for many years ($25-35$) and dropped sharply to $7 and was recently increased again.

Problem with taxes on stock trades is that global exchange competition is so high with the internet and DMA that liquidity can move to other jurisdictions fast.

]]> By: danps http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry.html#comment-46583 danps Wed, 06 May 2009 15:18:00 +0000 http://www.nakedcapitalism.com/2009/05/now-its-official-securities-industry-regulator-takes-care-of-self-not-investors/#comment-46583 Hi LeeAnne. The Deep Capture link I included claims the malfeasance the DTCC is engaged in has mostly to do with phantom stock - a way to engage in (ostensibly illegal) naked short selling. I think just getting more transparency there would be a good first step. And in any event the lobbyists would probably claim that taxing all trades would cause capitalism itself to grind to a halt. As opposed to its current high flying state. Hi LeeAnne. The Deep Capture link I included claims the malfeasance the DTCC is engaged in has mostly to do with phantom stock – a way to engage in (ostensibly illegal) naked short selling. I think just getting more transparency there would be a good first step. And in any event the lobbyists would probably claim that taxing all trades would cause capitalism itself to grind to a halt. As opposed to its current high flying state.

]]>