Reform the NASD!

The Financial Industry Association is a free organization depending on donations?  Why is that?

If it were a truly meaningful group--such as SIA or the Bank Dealer's Association or the Security Traders Association, or the Bond Traders Association--they would be charging massive dues and the firms would all belong.

I've been watching with modest interest as these dissident nominees are being elected in some of the districts.  The firms the dissidents represent are the questionable firms--not just the small ones.  It's as if the criminal side of the business is making an attempt to become legitimate by becoming active in their local districts.

Years ago they did it by bidding ridiculously low interest rates on bond offerings, winning the deal, selling the bonds at a loss but considering the loss to be well spent because they were building respect.

What must be remembered is that the NASD was allowed to be created by the SEC. While it is theoretically a self regulator organization it clearly dances to tunes being called by the SEC.  The Maloney Act can be repealed by Congress just as it was passed.

A good analogy would be the United Nations.  The fact is the world is run by half a dozen great nations--yet the UN is a cesspool of nonsense with its agenda being driven by third world schidtholes.

If the NASD becomes controlled by the brokerage industry equivalent of third world countries the SEC will simply ask Congress to repeal the Maloney Act and will take control once again with their very heavy hand.

If you think the NASD is heavy handed, or favors the big firms, wait till the SEC wraps its loving arms around the brokerage industry.

The NASD is a welcome buffer between the industry we know and the industry the bureaucrats would create if the NASD were gone.

The SEC views electing questionable characters to the NASD leadership as a bull views a red cape being waved in its face.

This FIA and its agenda is a horrible idea.

It might be a terrible idea to you, but you must remember that you were a corporate suckass, with all your ‘committee work’ and all, and therefore you would want all of the authority of a self regulating body concentrated in the hands of your corporate masters.  There are those who believe that the NASD as it stands wields too much power in areas where it rightfully has no business, and as a consequence should be brought back to a more centrist position where it represents ALL of the industry.

[quote=rrbdlawyer]

Finally, I will not respond to any posting by NASD Newbie and would hope that all serious members of this forum will do the same.  That poster is simply a malicious troublemaker intent on disrupting any meaningful dialog and should not be rewarded by attracting the attention he or she so desperately craves.

[/quote]

Nah, I am the voice of experience.

The NASD exists because the industry approached Congressman Maloney back in the late 1930s asking for permission to form a self regulatory body to insulate the broker/dealers from the heavy hand of the SEC.

After holding hearings and all the other drills the Congress engages in the Congress passed The Maloney Act of 1939 which granted Wall Street to regulate itself--so long as they put some real teeth in their efforts.

For close to 70 years the NASD has fulfilled that mission admirably.  Yes they have rules and yes those rules are arguably more onerous on the smaller firms.

However, the unintended consequence of electing officers of questionable firms such as Gunn Allen to the leadership of the NASD invites the SEC to revisit the issue.

For that matter the NASD itself could revisit the issue and ask Congress to revoke its own charter--after arranging for the Securities Industry Association, or one of the other legitimate trade groups, to hire the staff and transfer the self regulatory powers.

Populist ideas have a certain appeal, however there is always a lot more to the story than what appears on the surface.

As I said earlier, if you think the NASD is onerous remember that the SEC has the right to simply take over the "Sell Side" of the industry which has been pretty much left to the NASD since 1939.

The saying, "If you like the Post Office you'll love government regulated health care" goes for this industry as well, "If you like the Post Office you'll love government regulated broker/dealers."

Support organizations like this goof ball idea at your own peril.

]As I said earlier, if you think the NASD is onerous remember that the

SEC has the right to simply take over the “Sell Side” of the industry which

has been pretty much left to the NASD since 1939.

[quote=DBCC]

[/quote]

The SEC is a government job, the NASD is not a government agency.

Regardless, what's your point?

what's the point?   Its pretty obvious....if the top brass at the NASD all are multi millionaries, they would cringe in fear if the SEC took over because their pay would be cut from millions to a hundred thousand or less....Also, I will ask you the same thing I always challenge the NASD Regulators with:  Name five reasons why direct supervision from the SEC would be bad for the 4000+ small firms out there?

With the NASD, technical violations get trumped up into huge fines by their buddies at NAC....With the SEC, they have to go to federal court..so they better have rock solid proof and utter disregard...also, the SEC staff operates in black and white...the NASD operates in grey areas....one firm gets a 25k fine, another 5k for the same infraction.

[quote=DBCC]

what's the point?   Its pretty obvious....if the top brass at the NASD all are multi millionaries, they would cringe in fear if the SEC took over because their pay would be cut from millions to a hundred thousand or less....Also, I will ask you the same thing I always challenge the NASD Regulators with:  Name five reasons why direct supervision from the SEC would be bad for the 4000+ small firms out there?

With the NASD, technical violations get trumped up into huge fines by their buddies at NAC....With the SEC, they have to go to federal court..so they better have rock solid proof and utter disregard...also, the SEC staff operates in black and white...the NASD operates in grey areas....one firm gets a 25k fine, another 5k for the same infraction.

[/quote]

The leadership of the NASD is not motivated by their paychecks--those who operate in the rarified air of $1 million or more per year are fully capable of walking away without diminishing their lifestyle because as those of us who earn less than that know a family can only spend so much money, can only enjoy so many vacation homes and so forth.

If one firm is fined $25,000 for the exact same offense that another firm received a $5,000 fine they should appeal it.  Arbitration between the NASD and its member firms is open to appeal--it's when non members arbitrate with members that final and binding kicks in.

Having been in a firm that was subjected to SEC aand NASD oversight and concurrent exams, I'll tell you with 100% objectivity that although they "shared notes", the SEC was way more professional, knowledgable, effective and way smarter. 

NASD, especially enforcement, is a joke. It's full of self-serving people looking to better themselves on someone else's back. 

Reform NASD? Forget it. Here's the single most important way to do that.  MAKE THEM LEGALLY ACCOUNTABLE FOR THEIR ACTIONS.

I will be first in line to sue them.

NEWBIE

First, You actually believe $$ doesn't motivate individuals at the NASD??  They are not motivated by their pay?  Wholly crap!  Are you serious when you say that?  Becuase if they are not motivated by pay, why should they take more then Chrmn. Cox?  After all 150k a year is not too shabby....Not motivated by pay...You are one funny guy....I thought we were dealing with the NASD here , i didn't realize they were the Monks of New Skete LOL

second:  Im waiting to hear 5 reasons why members would not want direct supervison from the SEC???

[quote=Philo Kvetch]It might be a terrible idea to you, but you must remember that you were a corporate suckass, with all your ‘committee work’ and all, and therefore you would want all of the authority of a self regulating body concentrated in the hands of your corporate masters.  There are those who believe that the NASD as it stands wields too much power in areas where it rightfully has no business, and as a consequence should be brought back to a more centrist position where it represents ALL of the industry.[/quote]

bump

[quote=DBCC]

NEWBIE

First, You actually believe $$ doesn't motivate individuals at the NASD??  They are not motivated by their pay?  Wholly crap!  Are you serious when you say that?  Becuase if they are not motivated by pay, why should they take more then Chrmn. Cox?  After all 150k a year is not too shabby....Not motivated by pay...You are one funny guy....I thought we were dealing with the NASD here , i didn't realize they were the Monks of New Skete LOL

second:  Im waiting to hear 5 reasons why members would not want direct supervison from the SEC???

[quote=DBCC]

NEWBIE

First, You actually believe $$ doesn't motivate individuals at the NASD??  They are not motivated by their pay?  Wholly crap!  Are you serious when you say that?  Becuase if they are not motivated by pay, why should they take more then Chrmn. Cox?  After all 150k a year is not too shabby....Not motivated by pay...You are one funny guy....I thought we were dealing with the NASD here , i didn't realize they were the Monks of New Skete LOL

second:  Im waiting to hear 5 reasons why members would not want direct supervison from the SEC???

[/quote]

I do believe that the highest paid executives are not motivated by their paychecks--that you refer to $150,000 as "not too shabby" indicates that you have absolutely no idea what it's like to associate with people who are making millions but are motivated by things like power and prestige.

As with all private sector employers the most senior people receive compensation that is allocated to them by their board.  If people are motivated by money why did Christopher Cox accept $150,000 to head the SEC instead of becoming an executive of NASD, SIA or one of the other organizations that lavish their people with compensation that would make a potentate proud?

As for five reasons why it would be bad to be regulated by the SEC--it's a nonsense game.  Why not make it ten?  Fifteen?

How about one--government doesn't do anything well.

I do know that when government quits regulating things; ie utilities (see Enron, et al) or Glass Steagall, bad things happen.

[quote=no idea]I do know that when government quits regulating things; ie utilities (see Enron, et al) or Glass Steagall, bad things happen.[/quote]

Well then, you want to be sure to vote for a Democrat every chance you get.

It would be fun to read how deregulation led to Enron's implosion?

It would also be fun to read how the dismantling of Glass-Stegall has led to "bad things."

[quote=NASD Newbie][quote=DBCC]

NEWBIE

First, You actually believe $$ doesn't motivate individuals at the NASD??  They are not motivated by their pay?  Wholly crap!  Are you serious when you say that?  Becuase if they are not motivated by pay, why should they take more then Chrmn. Cox?  After all 150k a year is not too shabby....Not motivated by pay...You are one funny guy....I thought we were dealing with the NASD here , i didn't realize they were the Monks of New Skete LOL

second:  Im waiting to hear 5 reasons why members would not want direct supervison from the SEC???

[/quote]

I do believe that the highest paid executives are not motivated by their paychecks--that you refer to $150,000 as "not too shabby" indicates that you have absolutely no idea what it's like to associate with people who are making millions but are motivated by things like power and prestige.

As with all private sector employers the most senior people receive compensation that is allocated to them by their board.  If people are motivated by money why did Christopher Cox accept $150,000 to head the SEC instead of becoming an executive of NASD, SIA or one of the other organizations that lavish their people with compensation that would make a potentate proud?

As for five reasons why it would be bad to be regulated by the SEC--it's a nonsense game.  Why not make it ten?  Fifteen?

How about one--government doesn't do anything well.

[/quote]

I do regularly associate with highly compensated individuals, and I'm here to tell you that they are motivated by money, albeit to a lesser extent than an individual struggling to make ends meet.

You're out of your depth here, Putsy.  Drop it now before your ignorance REALLY shows.

You're correct Put. There were no problems in either the utility & financial services industry after deregulation. I apologize if my previous comment made you soil your depends.

[quote=no idea]

You're correct Put. There were no problems in either the utility & financial services industry after deregulation. I apologize if my previous comment made you soil your depends.

[/quote]

Child, all I did was ask you to cite an example of how deregulation led to probems.

Surely you have an example.  I am laboring under the assumption that Enron imploded due to dishonest accounting involving the formation of partnerships which were portrayed as being obligated to pay huge debts rather than the corporation itself.

You're saying that I'm wrong, that it was deregulation.  I'm just all ears as to why you think that is it rather than what I think.

Then you brought up Glass Stegall--and said that as it's been dismantled bad things have happened.  Just what do you have in mind in that area?

If it's nothing as you say, why did you say it?

[quote=no idea]I do know that when government quits regulating things; ie utilities (see Enron, et al) or Glass Steagall, bad things happen.[/quote]

Actually, I think you have that backwards. When the Government regulates business and tries to control, meddle, manipulate, fiddle with the free marketplace and the economy, THAT'S when things get screwed up.

It's like a bunch of monkeys trying to tune up your car.  They look busy and make a lot of noise, but they really screw up the engine.

the nasd is more efficient the the Government??? LOL

Again:  if you want to do ad hom. attacks to avoid the question, fine, but there really is no big deal with the SEC being our regulator because.....they already do!  We all get SEC audits and requests...they are fine by me...Unlike some 2 year examiner claiming to be a Supervisor trying to get his pound of flesh to make a name for himself.

the NASD is setting up fake Broker Dealers to run sting operations with the FBI ( check out Shimoda-Atlantic vs NASD)..doesn't this make them a quasi govt aganecy anyway?

I'll make it easier...give me three reasons why we wouldn't want the SEC to regulate us directly without the NASD?...

[quote=DBCC]

the NASD is setting up fake Broker Dealers to run sting operations with the FBI ( check out Shimoda-Atlantic vs NASD)..doesn't this make them a quasi govt aganecy anyway?

[/quote]

No, idiot, the FBI is setting up fake Broker/Dealers with help of the NASD--just like the FBI might set up a sting with any other citizen.

Do you think it's good that the FBI try to stop crime in the industry?

[quote=rrbdlawyer]

The Maloney Act is something like the McCarthyism. Both obsolete. The NASD is like a virus feeding of the host of its members and the FIA is the cure. 

There doesn’t have to be any analogy to explain what is happening with the NASD and the FIA. This is a classic case of a blotted, out of touch bureaucracy composed of bureaucrats who are unable to cut it in the private sector trying to control the creative, thinkers and doers of the organization. NASD Newbie we are the NASD. You’re just some cog in the wheel, punching in and out, watching the clock and hoping for a pension when you retire. You don’t have a creative thought in your whole body.

NASD Newbie, your time has come. When the FIA regains control of the NASD, you and the rest of the sorrowful bureaucrats working at the NASD will be out of a job. Try and get new position in the private sector after listing your previous work experience...... professional bureaucratic and see how far that takes you.

Who knows maybe when all this happens you will have enough time in to collect that meager pension you have been working toward.

[quote=I_hate_the_nasd]

When the FIA regains control of the NASD, you and the rest of the sorrowful bureaucrats working at the NASD will be out of a job.

[/quote]

Regains?  When did they have control in the past?  How did they lose it?

[quote=NASD Newbie][quote=I_hate_the_nasd]

When the FIA regains control of the NASD, you and the rest of the sorrowful bureaucrats working at the NASD will be out of a job.

[/quote]

Regains?  When did they have control in the past?  How did they lose it?

[/quote]

Attaboy, Putsy.  When you're caught out, obfuscate.

You're still a moron.

Just so there is no confusion....

Im still waiting for reasons why we would not want direct supervison form the SEC and Newbie sees nothing wrong with STING operations by the government using OUR SRO???  

[/quote]

Did you read the salary report I gave you earlier?  The head of SIA makes ONE MILLION base as well!!!....you don't think he's in the big boys pocket?  Plus those same guys endorsed ( illegally according to their own bylaws) Dave DeMurro and his clan....They could have embraced the Goble slate and made a statement....but they are sheep who will soon be led off the cliff.  Why won't the SIA stand up for brokers rights either?  The leaders of the FIA have advocated a Brokers Union...this way, when the NASD and SEC shove worthless self serving rules down their throats, they can convene the union and call a stike...Imagine the market on say, a friday in October of all months, and CNBC is reporting that hundreds of thousands of brokers across the country will not be reporting for work on monday and even if they did show up, they will only accept unsol. orders??????  Chew on that thought for a moment.....I'd bet the market would be down 500 points or more at the mere thought of it.   Why are we not organized like other industries????

Marc makes 1.2 million--I suspect Don makes 800,000 and the other senior staff at least 500,000 apiece.  Wall Street, above all else, is hedonistic.

But so what?  It's a private industry and the members pay the dues that makes those compensation packages possible.

You really do not understand the mindset of a broker if you think that they'd want to be organized as a union---they're businessmen and businesswomen.

Even those who are employed with the tightest golden handcuffs and proprietary products are more free enterprise inclinded than any union member.

Unions are for losers--there is no way in hell you'll ever convince brokers that they're losers, much less than they want to join forces so they can all be paid as if they were teachers.

LOL...Do you read what you write?  Ok...for starters, Brokers are tired of being treated like blood sucking vipers by the NASD and by the large wire house type firms....they want to be able to build their book and be able to MOVE without Pru, merrill and the rest putting them out of business all becuase they wanted to be an OSJ with a smaller firm...Unions are for losers hmmmm....Thats funny becuase the last time i checked, the Transit workers in NYC shut down a city and got what they were fighting for....Why can't brokers pay a fee of say 50.00 annually to have somebody fight for them?  Hell, the NASD and the states charge these same brokers a couple thousand EACH YEAR just to renew their licenses ...

FWIW: I have been a broker.  I have written busines.  And Im still on the sales side and i make more money then God...but Im fighting this fight for what is RIGHT....why is the NASD so afraid?  why do they want the FIA to go away?  Sounds to me like there are some scared people there....its ok....you don't have to be afraid...unless of course you have some sort of financial position at stake...isn't money always at the root of all problems?  Whats the first thing you noted on this thread? You criticized the FIA for being funded by donations.....why can't the SIA do that???  well, not if you have a couple million dollar men running the organization, and as we all see now, money is at the heart of the problems with the NASD and SIA.

It would help your windmill tilting if you learned that the first letter of sentence is capitalized when writing in English.

The reason that brokers don't join organizations portraying themselves as being a union is because unions are for losers.

Yes the transit workers were able to shut down the system--but you're not going to be able to convince a producing financial advisor that they're the same as a guy who drives a subway, or opens and closes the doors.

What their union won for them was a pay increase--but they all earn the same thing.

Do you believe that every stockbroker in the country should be paid by the hour, with double time for Saturdays?  As if they were driving a bus?

You ask why the NASD is afraid.  Who says they're afraid?

I suggest they are no more afraid of you than somebody who is trying to kill a cockroach is afraid of the roach.

Do you understand that electing somebody from GunnAllen to the District Board is actually not something that honest people look on as a win for them?

It appears that you believe that there are more dishonest brokers in the country than honest brokers.  You're dead wrong--but when you only associate with crooks you can easily become convinced that everybody is as sleazy as you.

I 'll tell you what…Since you refused to answer the question about the SEC…I’ll give you a 2nd option…Let’s pull up the CRD records of Merrill and Gun Allen…Which do you think is bigger, Badder and thicker???  Come on, take the Pepsi Challenge…How about Smith Barney?  Or Mogna Stanley? Come on…post up up here ( if you can even download them…Lehman’s record almost collapsed my computer it was so big!)

Im starting to see a trend here....a big claim is made and then nobody wants to back it uo....Hmmmm

"YOU DO NOT WANT TO BE REGUALTED BY THE SEC"!!!

can you give me three or four reasons why? 

no.

"GUNN ALLEN IS A BAD FIRM!"

Do you want to compare the records of the largest wire houses?

silence is golden

....here is somethig to chew on...pull up Gun allen on the broker check and it says they have 12 regulatory actions an 7 arbittrations.....I tried pulling up Goldman Sachs and Merrill and here is the message i got!!

Dear NASD BrokerCheck User,

Our records indicate that you have recently requested a
NASD BrokerCheck report to be delivered to you via e-mail.
The report that you have requested is greater than 1.5 Mb in file size.
Currently, NASD BrokerCheck does not support e-mail delivery of reports
greater than 1.5 Mb in size.

If you would still like to receive this report via US Mail, please take
the following
steps to ensure successful delivery:

1) reply to the e-mail address above;
2) ensure that the e-mail addressing information is not altered;
3) provide your full name;
3) and provide your full mailing address for US Mail delivery.


We regret any inconveniences that this may have caused you,

NASD BrokerCheck

I go by infractions per employee.

If a firm has 10,000 brokers and 100 violations, that's a 0.010/per broker ratio.

If another firm has 100 brokers and 5 violations, that's a 0.050/per broker ratio which is 5 times as much.

I agree.  MER will obviously have a longer report than GunnAllen, but what is the ratio per rep?  I’m sure that Merrill’s is much smaller than a bucket shop like GunnAllen.

MER's infraction per rep ratio is much smaller than Gunn-Allen's but to be fair, perhaps Gunn-Allen is trying to clean itself up a little. Their new General Counsel, David Jarvis, is an ethical guy.

On another note, I guess getting on Chris Cox' butt once in a while does work. Looks like he's coming around a little:

http://www.sec.gov/news/speech/2006091406cc.htm

I think one of the other Commissioners may have shown him this month's issue of RR which features bucket shops on the cover. He (Chris) actually said, "bucket shop" which is a term he probably was not familiar with a year ago.

If any of you guys are football fans, I would appreciate you pulling for the Trojans against those Cornhuskers tonight (even if Reggie Bush might have gotten us in trouble)!

 I went to the game Saturday it was great. To bad for Norte Dame, but Michigan look great. As for the FIA and Nasd I vote for reform, not just for smaller firms but also, for the registered rep.

[quote=advisor1] As for the FIA and Nasd I vote for reform, not just for smaller firms but also, for the registered rep.[/quote]

What is the reform that you think is necessary?

Do you favor rolling back the regulations that attempt--poorly albeit--to control the damage to the industry done by the stock promoters and penny stock chop houses?

Why do you suppose this organization--the FIA--is nominating stock promoters and penny stock firm executives for places on their district boards?

One of the most notorious chop houses was the firm First Jersey Securities.  It was formed by a guy named Robert Brennan.

Would you consider it to be a plus for the industry if Mr. Brennan was elected to the NASD Board of Governors just because the small firms wanted him to be a Governor?

I assume you would, but am wondering what your logic would be.  Please share it with me and the others who read these forums.

Thanks

Having a guy like Brennan or Frank Michelin (LH Ross) on the NASD's Board of Governors would be akin to having Ivan Boesky as Director of Enforcement at the SEC.

I want squeaky clean non chop house Governors on the NASD's BOD.

[quote=ymh_ymh_ymh]

Having a guy like Brennan or Frank Michelin (LH Ross) on the NASD's Board of Governors would be akin to having Ivan Boesky as Director of Enforcement at the SEC.

I want squeaky clean non chop house Governors on the NASD's BOD.

[/quote]

Do you, in your heart of hearts, think that Bill Singer does too?

Yes, because he has represented elderly women clients whose hubbies got fleeced by the chop house boys in Brighton Beach a few times and felt very sorry for them. Gavaroot pa Russki mob?

I guess their hubbies were afraid to sue for fear of swimming with the beluga.

Our definition of squeaky clean may be a little different, however. I like the Boy Scout type (no need to be Ivy League, but it helps). Take a look at Roel Campos' CV and you'll see why he's my favorite SEC Commissioner.

Bill, if you're reading this how about explaining your definition of squeaky clean. Who's your favorite SEC Commissioner? That says a lot about a person.

The gangsters like to hire ex enforcement types becasue it is believed that the best way to get around the rules is to use a guy who knows them from the other side.

I would wager that every chop shop on the street as a lawyer on staff, or retainer, who used to be an NASD or SEC enforcement lawyer.

Anybody who champions the election of a guy from GunnAllen to the NASD district board is not a friend of the honest segment of the industry.

I know the chop shops like to hire ex SEC guys. On Gunn-Allen, let's hope they're trying to clean up their act. David Jarvis (newbie GC) is too nice of a guy to soil his reputation if they're not.

The 2 Gunn-Allen cold call brokers (stock jockeys) who tried to strong arm that retiree friend of mine in Philly don't know jack about stocks, that's for sure. One would think if they want to snag some new biz, their first few tips should be in the money, don't you think?

On hiring ex SEC guys or NASD ones, there's a saying on the Street, "if you can't beat them, buy them."

[quote=ymh_ymh_ymh]

I know the chop shops like to hire ex SEC guys. On Gunn-Allen, let's hope they're trying to clean up their act. David Jarvis (newbie GC) is too nice of a guy to soil his reputation if they're not.

[/quote]

I do not know David Jarvis, but I do know that a lot of guys will be more than happy to cast their lot with a questionable firm if the compensation package is nice enough that they can retire once the tour of duty is over.

If done right the high priced compliance officer will be able to build enough plausible deniablity into their role so they don't go to prison.

If they do go, it will generally be for a fairly short time in fairly benign quarters and when they get out they'll have a hell of a party favor in an off shore account.

That's the damn shame.  Hundreds, even thousands, of suckers lose millions of dollars buying an imaginary cure for cancer.  If the NASD/SEC is able to make a case, and if they are able to win the case, a few of the principals will be barred for life and perhaps sentenced to some time at Eglin or somewhere like that.

When they go home they're still rich while their victims are eating cat food, pretending it's yellow fin tuna.

In the end the only real reform will be creating a regulatory system that isn't tied to firms regulating brokers but an independent system similar to the RIA structure and the 1940 act that includes commissions and fees. The idea you can "reform" while retaining the essential disfunction of the broader premise of the NASD is doomed and unexciting.

70% of current b/d staffing might be eliminated, that would help consumers and brokers alike. Compliance and support should all be portable and unbundled. It's the zero sum system that distributes all blunders and costs to every producer, consumer and firm and the underlying socialist culture that can't be reformed. It can only be eliminated completely. 

The system is broke and does need major reform, that’s a given. I feel sorry for every single boiler room/bucket shop/chop house victim.

[quote=ymh_ymh_ymh]

MER's infraction per rep ratio is much smaller than Gunn-Allen's but to be fair, perhaps Gunn-Allen is trying to clean itself up a little. Their new General Counsel, David Jarvis, is an ethical guy.

On another note, I guess getting on Chris Cox' butt once in a while does work. Looks like he's coming around a little:

http://www.sec.gov/news/speech/2006091406cc.htm

I think one of the other Commissioners may have shown him this month's issue of RR which features bucket shops on the cover. He (Chris) actually said, "bucket shop" which is a term he probably was not familiar with a year ago.

If any of you guys are football fans, I would appreciate you pulling for the Trojans against those Cornhuskers tonight (even if Reggie Bush might have gotten us in trouble)!

[/quote]

I live in the heart of Husker Nation and I absolutely loved the result.  I only wish USC would have put up another 28.  The saddest part about that was that we actually had a tornado touch down in Omaha and got anywhere from 2-5 inches of rain, 1/2"-2" diameter hail and 80 mph winds.  Instead of breaking to the weather to update us, they simply split the screen so all of the Husker-loving tools would be happy and showed the radar - couldn't hear anything the meteorologists were saying.  Completely incredible.

[quote=ymh_ymh_ymh]The system is broke and does need major reform,
that’s a given. I feel sorry for every single boiler room/bucket
shop/chop house victim.[/quote]



I agree completely, but I also feel that some of the blame has to fall
on those who are fleeced.  The old adage that greed overcomes fear
is true.



I think that it will only get worse as the boomers become more and more desperate to increase their retirement lifestyle.



What is also troubling is the appearance that the NASD and SEC seem to
view penny stock fraud as a victimless crime–or a crime not worthy of
their full attention.



The idea that the SEC allows issues of up to $5 million to fly below
the radar is in great part responsible for this.  Lots of the
penny stock frauds are offerings in the 4.5 million area–claiming an
exemption under one of those regulations like Regulation A or B or D or
whatever it is.



On the other hand, what about the legitimate offerings that are
small.  Should some small manufacturing firm have to go through a
full registration just in order to raise $4 million?  That
certainly seems onerous and unnecessary.



As Yul Brenner would say, “It’s a puzzlement.”

[/quote]

I agree completely, but I also feel that some of the blame has to fall on those who are fleeced. 
[/quote]

Blame the victim? Yeah, there's a defense strategy.

The problem in penny stock land and the boiler rooms et al is lack of funding at the SEC as well as rookies who don't understand how the game is played. I had to explain "wash trade" to a senior SEC lawyer not so long ago.

The key to stopping most of this is investor education. Yes, "some" of the victims are greedy and know better. They don't complain until they get hosed. Many are just naive and very desperate.

If the NASD was granted more comprehensive policing power, the SEC would have less "work" to do. I have found, overall, that NASD enforcement lawyers are much more savvy as to how the penny stock p&d game is played and who plays it than the SEC lawyers are. Also, there's no honor and glory at the SEC for those who pursue this type of security fraud. If you're not going to get a promotion or "atta boy" for it, why bother?

[quote=tjc45]

[quote= ]

I agree completely, but I also feel that some of the blame has to fall on those who are fleeced. 
[/quote]

Blame the victim? Yeah, there's a defense strategy.

[quote=Knows Wall St.] [quote=tjc45]

[quote= ]

I agree completely, but I also feel that some of the blame has to fall on those who are fleeced. 
[/quote]

Blame the victim? Yeah, there's a defense strategy.

[/quote]

It's called "Personal Responsibility."  If you get conned some of the responsibility falls on your shoulders.
[/quote]

 I see what you mean.

There is a growing number of cases appearing where people bought new or near new 06 cars only to later find out that their car had been damaged by Hurricane Katrina. Before the Feds could stop it, car haulers pulled thousands of new cars out of the muck and transported them all over the country. Inspectors stopped one load of new Nissans at the California border. But dozens more had already made it through the auction there. One dealer shipped his flood damaged inventory to a clean title state, washed the titles and then shipped the cars back to Mississippi. And then those cars and cars around the country were sold to the public. Today, many of these flood cars sit unsold as the title washing process continues. It's not enough to run the vin of the car being purchased through the fed registry. Many of these cars escaped before the feds could get to them. Anyone who doesn't get on their back and scrape under the dashboard looking for mud deserves what they get. That about cover it?

Conn men always have a way to justify what they do. Interesting that you agree with their POV.

Don't look now....But i just got a letter from The NASD...those' dissidents' apparently got the vote out:

Dear Executive Representative and Voting NASD Member/Owner:

My name is David Alsup and I am running for election as your NASD National Adjudicatory Council (NAC) Representative from the Western Region (Districts 1, 2. 3).  I would like your vote. 

I can guarantee you that you have never seen a letter like this before. Why? Well, the NASD pretty much likes to hand-pick the folks to serve on its committees and the NAC.  Frankly, I just don't think the NASD has any confidence in us as industry members to act responsibly. The NASD is wrong.

As one of the founders of the Financial Industry Association (FIA), I just launched an historic petition drive to win the nomination as your NAC Western Region District Representative, and I have been certified as an official candidate running on the FIA slate.  You now have a choice! 

I support a fair and balanced approach to regulation – one that is based upon a presumption of innocence.  Moreover, I do not believe that each and every violation requires a "death penalty" sanction and I am in favor of utilizing education and letters of caution for inadvertent, non-fraudulent violations where public customers are not harmed and there is no evidence of willfulness. 

FIA has recently launched a campaign to bring fairness and reasonableness back to all aspects of the NASD. I support that initiative.

Your ballots should now be or soon will be sitting in your mailbox.  I have enclosed a sample ballot (see below) that will explain FIA's position and how to best vote for the candidates that will represent your interests on the District Committee. 

I also support Samuel Lek who is campaigning in the New York NAC, and all of FIA's 32 candidates. I encourage you to vote for them as well to help assure your views will be properly represented.

As you may know, I am part of a slate a 34 candidates who were endorsed by the Financial Industry Association (FIA), which obtained petitions from over 730 NASD Member Firms. Twenty-eight of the FIA's candidates are by petition and six are cross-endorsed by an NASD nominating committee. The era of unopposed, hand-picked NASD candidates is over!  Now, you have a choice.  Now, we all have a chance to make things better.

As one of FIA's 34 candidates, I can assure you that we  have heard your complaints and read your comments, and we all support a change to the following:

I am pleased to join with FIA in this historic effort to democratize the NASD and return the self-regulatory organization to a partnership between the regulator and the regulated.  Now you must do your part!  Vote for the FIA slate.  Get your fellow Executive Representatives in the NASD community to vote the FIA slate for a change to fairness and reasonableness!!

The Financial Industry Association (FIA) is pleased to announce that over 730 NASD Member Firms signed FIA's petitions for NASD elective office. As a result of this historic campaign, FIA's slate of candidates includes 28 nominees by "petition," and 6 nominees cross-endorsed by the District Nominating Committees.

FIA has launched this historic effort to democratize the NASD and return the self-regulatory organization to a partnership between the regulator and the regulated.  Now you must do your part!  Vote for the FIA slate.  Also, please get your fellow Executive Representatives in the NASD community to vote the FIA slate for a change to fairness and reasonableness!!

You may receive multiple ballots for this election process since there are 13 different contested NASD positions. You may VOTE in EVERY district where you have a registered branch office.  For every ballot you receive, please VOTE and return in the original envelope provided by the NASD.  For more information  see: www.FinancialIndustryAssociation.org.

I am available to discuss any issues you may have concerning this election and I can be reached at 800 252-3017, or you can email me at [email protected].