The Future of Citi, SEC, and FINRA

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Jul 16, 2009 8:35 am

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#333333; FONT-SIZE: 10pt">An irreverent Wall Street Blog#333333; FONT-SIZE: 10pt">
by Bill Singer


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#333333; FONT-SIZE: 10pt">Blog Home | Past Entries


#333333">A Double Header: On the Future of Citi and the SEC (with a side order of FINRA)#333333; FONT-SIZE: 12pt">


#333333; FONT-SIZE: 10pt">Written: July 16, 2009#333333; FONT-SIZE: 10pt">


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#333333; FONT-SIZE: 10pt; mso-no-proof: yes">#333333; FONT-SIZE: 10pt">


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#333333; FONT-SIZE: 10pt">Changing Citigroup


#333333; FONT-SIZE: 18pt">Citi's management is shifting around. Is this enough to save the troubled bank?#333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 18pt">With #333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 10pt; FONT-WEIGHT: normal; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-font-size: 24.0pt; mso-bidi-font-weight: bold">·         #333333; FONT-SIZE: 18pt">Vince Farrell, Chief Investment Officer for Soleil Securities in New York.; and#333333">
#333333; FONT-SIZE: 10pt; FONT-WEIGHT: normal; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-font-size: 24.0pt; mso-bidi-font-weight: bold">·         #333333; FONT-SIZE: 18pt">Bill Singer, Shareholder in the Securities Practice Group of the law firm Stark & Stark and Publisher of http://BrokeAndBroker.com and http://RRBDLaw.com#333333">

Bill Singer: I think Citi is a dodo from a now discredited age, and it should probably be permitted to die a quiet death. It would likely be best for the company to divest itself of many segments and to trim down to whatever nugget its management team views are potentially profitable. Once again, hard questions need to be asked and choices made. Is the name "Citi" still of any value? Does the public harbor mistrust toward the conglomerate and is there any way for the lost credibility to be regained? Does the industry view Citi as a terminal patient on life support--and will that make it even harder to attract top execs to what is viewed as an organization whose plug may be pulled?#333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 18pt">To read the entire Intelligent Investing Panel interview, visit:#333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 13.5pt">http://www.forbes.com/2009/07/15/citi-bank-of-america-intelligent-investing-financials.html#333333; FONT-SIZE: 10pt">


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#333333; FONT-SIZE: 10pt">Letters To The SEC


#333333; FONT-SIZE: 18pt">Securities and Exchange Commission Chairman Mary Schapiro is settled in, and investors are putting in their requests.

With #333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 10pt; FONT-WEIGHT: normal; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-font-size: 24.0pt; mso-bidi-font-weight: bold">·         #333333; FONT-SIZE: 18pt">Lynn Phillips-Gaines, Founder and head of a Raymond James financial services firm based out of Mississippi; and#333333">
#333333; FONT-SIZE: 10pt; FONT-WEIGHT: normal; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol; mso-bidi-font-size: 24.0pt; mso-bidi-font-weight: bold">·         #333333; FONT-SIZE: 18pt">Bill Singer, Shareholder in the Securities Practice Group of the law firm Stark & Stark and Publisher of http://BrokeAndBroker.com and http://RRBDLaw.com#333333">

Bill Singer: In terms of answering your question, I see the SEC as a now failed institution that lacks credibility in the eyes of the American investor. I think its reputation is so damaged that trying to glue it back together and then whitewash over the cracks will prove a fatal decision. I would end the SEC, and I would also call upon Congress to abolish the Maloney Act, which provides for the existence of the Financial Industry Regulatory Authority (FINRA). I think we will be wasting far too much time and resources trying to fix a broken organization when it would be more effective to re-think the failed assumptions now embedded in the SEC and FINRA and simply design a newer regulatory architecture whose roots are in the 21st Century. Your stock broker or investment adviser could be a straight arrow, scouring the financial world for the very best products, but it's entirely likely they aren't. They could just as easily push you into "house" products that help them reap better commissions. The fact is, the latter situation is far from uncommon as brokers are typically not legally bound to find the "best" products for you, merely ones that are considered "suitable."#333333; FONT-SIZE: 10pt">


#333333; FONT-SIZE: 18pt">To read the entire Intelligent Investing Panel interview, visit:#333333">

#333333; FONT-SIZE: 10pt">Http://www.forbes.com/2009/07/15/securities-exchange-commission-intelligent-investing-regulation.html


#b11440; FONT-SIZE: 24pt; mso-bidi-font-family: Arial">VISIT WALL STREET'S LEADING ONLINE COMMUNITY#993333; FONT-SIZE: 10pt; mso-bidi-font-family: Arial">
BrokeAndBroker.com#333333; FONT-SIZE: 10pt">