FINRA; Formerly The NASD Said to Have Invested In Madoff

“Did you ever have one of those days where you just feel like watching a movie or perhaps checking out a preview?

I feel like today, a Friday in the latter part of May, is one of those days.

I am guessing that market activity may be muted so let’s go into our “archives” for a clip in which numerous questions posed by an attorney bringing suit against Wall Street’s self-regulator, the head of the Madoff Investors Coalition, and yours truly with an attempted rejoinder by former SEC chair Harvey Pitt are on display. The bulk of the questions raised in this clip are key points in the aforementioned suit, voluminous details of which are included in this compendium, Amerivet Securities v FINRA.

Be careful not to spill your popcorn or your soda because some of what you may see and hear during this 18 minute clip might truly disturb you.

I know it disturbs me and upwards of 70% of the FINRA member firms which during the 2010 FINRA Annual Meeting voted for the very transparency I called for in this clip.

In the inimitable words of Warner Wolf, ‘let’s go to the videotape’ embedded in my commentary from September 15, 2009,

On the heels of President Obama’s speech on Wall Street in which he called for meaningful financial regulatory reform, I welcome submitting to him and the American public the following video clips. These clips are from Fox Business News “America’s Nightly Scoreboard” with David Asman on September 3rd.

While President Obama and Congress may believe financial regulatory reform needs to focus on the SEC, the Federal Reserve and assorted other governmental agencies, I would remind the President and his Congressional colleagues that Wall Street is regulated not only by the SEC but to a great extent by the self-regulatory organization known as FINRA (Financial Industry Regulatory Authority).

This discussion on “America’s Nightly Scoreboard” is separated into two parts.

Highlights from the videos include:

1. Richard Greenfield, an attorney representing Amerivet Securities, makes the claim that FINRA under the leadership of Mary Schapiro failed to protect investors.

2. Former SEC chair Harvey Pitt defends Shapiro and FINRA

3. Greenfield indicates that a FINRA insider claims FINRA invested in Madoff!!

4. In Part II of the video clips, your host here at Sense on Cents joins the panel and provides details as to why FINRA, via its parent the NASD, did have responsibility to oversee Madoff. I also comment on the nature of the relationship between Wall Street and Washington, FINRA’s investment and timely liquidation of its Auction-Rate Securities position, and the need for total transparency at FINRA.

4. Head of the Madoff Victims Coalition for Investor Protection, Ronnie Sue Ambrosino, weighs in that the entire regulatory structure from the SEC to FINRA to SIPC (Securities Investor Protection Corporation) have failed to protect investors.

In my humble opinion, the conclusion of this show highlights the screaming need for FINRA to open its books and records for a full and thorough independent analysis and review. In so doing, hopefully investors specifically and the American public at large can regain a degree of confidence in the badly shattered Wall Street regulatory process.

If you care about the markets and our country, I beseech you to watch this 18 minute video in its entirety.

Thoughts, comments, questions always welcome and appreciated.

LD

PART I”

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