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Jan 14, 2010 4:01 pm
An irreverent Wall Street Blog
by Bill Singer Subscribe to RSS Feed: <hr size="1"> <div ="rrbdMdFntArlBlk" style="" align="right"><a href="" target="_blank">Blog Home</a> | <a href="" target="_blank">Past Entries</a></div> The Regulatory Woodshed Written: January 14, 2010

As noted in my current Street Legal column at Registered Rep. Magazine<> ,

without admitting or denying the
allegations, respondents Fortune Financial Services and its Registered
Principal Brian Lee Daniels consented to the entry of findings and
pursuant to the Financial Industry Regulatory Authority’s (FINRA’s)
Acceptance, Waiver and Consent (AWC) settlement process. FINRA
found that acting through Daniels, FFS failed to maintain and preserve
all of
its business-related electronic communications (and lacked adequate
and procedures relating to such record retention); improperly increased
number of registered representatives in its offices despite failure to
FINRA’s approval; and conducted business at unregistered branch

Daniels was fined $25,000 and suspended nine months in Principal capacities only.  FFS was censured and fined $125,000 — but it's what comes next that's truly noteworthy. In addition, FFS was prohibited for 90 days, commencing five business days after issuance of the AWC, from registering any associated persons, except for individuals who perform only compliance and/or supervisory duties.

Why does there always seem to be a regulatory woodshed for FINRA's member firms and registered reps but no place for the regulator to take a time-out when it misbehaves? Was FINRA fined for its lapses as documented in the press and its own Madoff Report? Not that I have read. Were any senior level FINRA regulators suspended or fired? Again, not that I have read. Oddly, FINRA imposes a hiring ban upon the likes of FFS, yet sees no inconsistency with simply sloughing off its own shortcomings and seeking even more responsibilities among investment advisors and financial planners (with the concomitant increase in revenues).


Jan 14, 2010 6:12 pm

These days, a lot of conservative young people aspire to own a sustainable, diversified farm business with a big screen TV and satellite connection.

  Standing at one edge of the property, you can see the entire operation. (Production, marketing, "compliance",  the welding shop, and a fishing pond for outdoor entertainment.)   Probably won't even pay any taxes. If you were young, would you choose to become dependent on an imploding tax-dependent economy which is full of politicians, bankers, tax collectors, corporate managers - or would you choose to own the means of production (small business)?   This whole Wall Street grab is going to uglier before it gets prettier. The only logical response is to simplify and get more control over your life, and align your business life with your personal life so you love your job, balance work and leisure, and waste less tax money supporting a corrupt system.