Giving Corzine A Free Pass On His Registrations Gives FINRA Another Black Eye

Wednesday, November 09, 2011 07:49
edit
Giving Corzine A Free Pass On His Registrations Gives FINRA Another Black Eye

Tags: FINRA

A regulator doctoring records is a relatively minor infraction as far as Congress is concerned. The perception that FINRA gave MF Global executives a free pass before that firm's collapse is a much bigger deal.

This Website Is For Financial Professionals Only


 

People are noticing that FINRA gave John Corzine a waiver on his securities exams after he came back to the industry in 2010.

 

Since he didn't make the bad trades that doomed MF Global, on the surface the free pass seems relatively innocent.

 

But since about $600 million in MF Global clients' money is still missing, anything less than absolute by-the-book compliance looks pretty bad.

 

If FINRA was happy to bend the letter of the rules for Corzine, the head of the firm, what does that tell the public about the way the regulator dealt with street-level enforcement?

 

Did his employees know he was only licensed on paper? 

 

We'll never know whether MF Global would have kept better records if Corzine had had to retake his securities exams on a regular basis like everyone else in the brokerage world.

 

But two short weeks after the SEC had to tell FINRA to clean up the way it handles its own documentation to avoid "creative mistakes," lawmakers should be wondering whether lax enforcement is costing investors money and the good actors in the industry their reputations.

 

Isn't that the opposite of the way regulation is supposed to work?

 

Comments (1)

...
dmorton
No one should be above the mundane and more when it comes to licensing. It's inexcusable and is indicative of how the heads of our financial industry get a pass from the very regulators that should be looking out for the rest of us. How many scandals are enough?
dmorton , November 12, 2011

Write comment

You must be logged in to post a comment. Please register if you do not have an account yet.

busy