Conflicts Of Interest Shadow SRO Debate Hot

An government transparency group called AllGov.com is pointing out what probably should have been a factor in the debate leading up to last week's somewhat tardy and fractious report: As it turns out, Mary Schapiro wasn't the only SEC commissioner with strong ties to FINRA, but she was the only one who recused herself from the policy-shaping process.

Elisse Walker, who was apparently making $3.7 million a year at FINRA before being appointed to one of the top SEC posts in 2008, stayed in the debate even though it might have raised questions about whether she was acting in investors' best interests or FINRA's -- and now those questions are rising to the surface.

This should not be about political affiliation or even regulator compensation, although now that you mention it, it's interesting that an industry-funded regulator is paying its top-level staff that kind of Wall Street salary. 

Instead, as the fiduciary debate shows, it's just about making sure that there's not even the appearance of a conflict of interest between the "industry" and the retail investors it serves. Appearances can matter almost as much as the real thing, and telling them apart can be a can of worms. 

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