FIA Prompts NASD Reform!

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Sep 27, 2006 9:23 am
Posted 9/26/2006 6:09:52 PM
 
http://financialindustryassociation.org/blog.asp


The Financial Industry Association (FIA) applauds the NASD's announcement today in its Notice to Members 06-55 that it is revising the much-criticized Sanctions Guidelines to clearly reflect that regulatory sanctions are not supposed to be punitive. In a stunning victory for FIA's recent reform initiatives, the new NASD Chairperson and CEO Mary L. Schapiro stated that:

"NASD sanctions are intended to be remedial, not punitive," said NASD Chairman and CEO Mary L. Schapiro. "In the absence of fraud or egregious conduct, their purpose is to correct violative conduct, not to damage a firm's ability to conduct business and to serve the investing public. NASD is committed to being a vigorous regulator, but it is equally committed to fairness in the way sanctions are levied."

FIA argued during its historic contested elections last year for the very reform that NASD has finally granted. Further, members of our coalition have publicly championed this exact issue for many years --- please see, http://www.rrbdlaw.com/2006/nasddis.htm
 in which the following proposal was presented to Ms. Schapiro's predecessor in 2002 by Bill Singer and his colleagues, and was summarily rejected by the Glauber team:

IV. REGULATORY SANCTIONS
We would seek a membership vote on whether monetary sanctions should be based upon a percentage of gross revenues or similar baseline. We believe that today's system of fines is unfairly biased in favor of major, national firms. The imposition of a flat, across-the-board fine, e.g., $25,000 fine, may be a hardship on smaller firms where it may be viewed as nuisance value by a larger one.)

FIA looks forward to continued dialog with NASD and hopes to further engage Chairperson Schapiro on further matters on our reform agenda. This is proof positive that a constructive program of reform can achieve results if smaller NASD members will continue to work with us and support our efforts. We thank the Schapiro regime for its positive response to our suggestions and hope that this is but a first step in restoring faith and confidence in self-regulation.
Sep 27, 2006 9:28 am

US Senator Specter thinks the SEC's $10M fine levied against Morgan Stanley recently was too small.


Sep 27, 2006 9:30 am

Typo, $10MM as in TEN MILLION DOLLARS.

Sep 27, 2006 9:32 am

NASD, SIA, and other organizations have on-line membership rosters so that others can see who has joined the organization.



Does FIA have an on-line membership roster?

Sep 27, 2006 10:07 am
NASDY Newbie:

NASD, SIA, and other organizations have on-line membership rosters so that others can see who has joined the organization.

Does FIA have an on-line membership roster?


Why would you care?

Sep 27, 2006 10:18 am

Because I believe that an organization such as this has credibilty if others know who supports it.



Why would you not want to know?

Sep 27, 2006 11:40 am

What would be a specific example of something that the FIA would change?



You keep saying that the regulations need to be rolled back.  That
sounds like a criminal whining that the reason they're in trouble is
because of the laws that are unfair.



What would be an example of an unfair NASD rule?  Why is it unfair?  What would make it fair?

Sep 27, 2006 12:29 pm

Literature is filled with examples such as the exchange from A Man For
All Seasons--you'll find lots of it in Shakespeare.  None of it is
relevant except as rallying cries.



The unvarnished truth is that FIA is attempting to hijack the NASD--to turn guarding the chicken house over to the fox.



The damage done to the industry's reputation if the industry's shady
operators achieve respectability because the sheep cast their votes
with a wolf in sheep's clothing will damage the sheep in the long run.



The NASD has served the industry well for close to 70 years.  No
organization as large as NASD is going to be immune to things that
drive the member's crazy.  But using the one firm, one vote rule
to neuter the organization is not in the benefit of those who can grasp
the analogy of turning the police department over to the mafia simply
because the mafia engaged in a public relations effort.



My question was easy--cite an example of something the NASD is doing that is unfair.  You came up empty handed.  Why?

Sep 27, 2006 12:37 pm

Let me phrase that more simply.  If I were king and could change
the NASD what would be your top three wishes for me to change?

Sep 27, 2006 1:37 pm

Your suggestion that the NAC would be powerless to increase fines
levied by district hearing panels is a non-starter.  Especially in
light of the fact that you are attempting to hijack the districts.



Under you scenario a panel of shady firms could rule that a fellow
shady firm was guilty of a violation and levy a ridiculously low
penalty--that way it can be claimed that they found their fellow shady
B/D guilty and levied what they considered to be a fair fine.



"Meyer Blinder, you are guilty of stock manipulation and this panel
fines you the sum of $500" type judgements could be made and you would
not favor an appealate body--the NAC--being able to increase the
sanctions to something reasonable?



Doesn't work for me.  The NAC should be able to increase or
decrease a decision  made by a lower  body.  In the
court system are appealate courts required to go along with the lower
court?

Sep 27, 2006 8:54 pm
NASDY Newbie:

Because I believe that an organization such as this has credibilty if others know who supports it.

Why would you not want to know?


When did I say that I didn't want to know?


The question posed was, "Why do YOU want to know?".  I'm trying to understand just why the concerns and thoughts of those who work and contribute to our business and our society could be of any interest or comprehension to you.


Frankly, you seem to be nothing more than a disruptive influence on these boards, and presumably on this planet.

Sep 27, 2006 9:23 pm
NASD Newby:

Let me phrase that more simply.  If I were king and could change
the NASD what would be your top three wishes for me to change?



How about if you start by abolishing yourself...?