Researching The Advisor Tied To The Soccer Mom Who Allegedly Ran A Prostitution Ring Shows Why FINRA BrokerCheck Stinks And Why SEC And FINRA Are Not Trusted

Thursday, March 08, 2012 12:41
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Researching The Advisor Tied To The Soccer Mom Who Allegedly Ran A Prostitution Ring Shows Why FINRA BrokerCheck Stinks And Why SEC And FINRA Are Not Trusted

Tags: compliance | Dodd-Frank | FINRA | regulation | sec

FINRA BrokerCheck is asking for comments on how to improve disclosures about licensed securities salespeople—brokers. But it’s hard to take FINRA’s request seriously because FINRA’s BrokerCheck site is so incredibly lame at protecting investors and enabling disclosures about brokers. Here’s an example of how FINRA BrokerCheck makes a mockery of FINRA’s effort to protect investors and foster confidence in securities markets.

This Website Is For Financial Professionals Only


 
David Walker is a broker who, according to press reports, is being tied to Anna Gristina, a suburban soccer mom of four who was arrested yesterday for allegedly running a Manhattan prostitution ring. According to reports, Walker is a broker at Morgan Stanley’s “wealth management division” was going to finance the operation. The New York Post says Walker, 47, is "an ultra-successful investment manager for Morgan Stanley and was allegedly meeting with Gristina to talk about funding an online version of her upper-East Side operation.
 
When you look up David Walker, you get five pages of names. However, none of them is David S. Walker--the broker linked with the "millionaire madam."
 
To be clear, when you search FINRA BrokerCheck for David S. Walker, you get his record and see a detailed report about him. But when you search David Walker, then David S. Walker does not appear.
 
FINRA makes it so difficult to get what you want on BrokerCheck. In this case, you would have to know David Walker’s middle initial to verify that he is indeed a broker at Morgan Stanley and see his regulatory record.
The New York Post reports today that Walker has been placed on administrative leave by Morgan Stanley.
The Post quotes prosecutors saying at Gristina's Feb. 23 arraignment in Manhattan Criminal Court, without naming Walker: “We picked her up yesterday with a Morgan Stanley banker who she counts a close friend and she had been present at his office for a meeting in which she was trying to solicit money to fund what we believe is another business venture on the internet that involves matching up male clients with female prostitutes."
 
No one knows yet if broker David S. Walker was really involved in this alleged prostitution ring. But investors who are seeing his name in tawdry headlines might be trying to look up their advisor to find out who he really is. They would not be able to find him on FINRA BrokerCheck unless they know his middle initial. That’s not right. 
 
This is one very specific example of why FINRA BrokerCheck is flawed but there are so many others. While it is great that FINRA is asking for comments about how it can improve the public disclosure system, it should never have been neglected this long. And the SEC, which is charged under federal securities laws with oversight of FINRA, has been way too lax for allowing FINRA to get away with this.
 
FINRA won’t have credibility and will be hurting confidence in the markets until it makes its disclosure system transparent and easy to use.
 


 

 

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