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Corporate America controls the U.S. Chamber of Commerce. These are the same people that want tort reform, and to limit the liability and responsibility of corporate America, and everyone else, for polluting the environment, selling defective products, price fixing, financial fraud, and otherwise screwing consumers, every chance they can get away with.
So when the U.S. Chamber of Commerce criticizes FINRA, you know things must be really bad.
The U.S. Chamber of Commerce issued a report yesterday that the Dodd-Frank financial reform laws fail to address transparency and due-process problems at the Financial Industry Regulatory Authority Inc.
According to the report, in addition to FINRA, the chamber cited Institutional Shareholder Services Inc., the Financial Accounting Standards Board and the Public Company Accounting Oversight Board as wayward self-regulatory organizations or SROs.
FINRA is criticized for having a board comprising a "majority of independent directors with limited or no experience working for a financial services firm," instead of one made up of financial industry representatives. It also asserted that Finra members "no longer have a meaningful role in establishing policies and priorities."
Fair and consistent enforcement of the law and reasonable opportunities for private parties to seek redress for intentional or reckless violations of the law are fundamental parts of our financial regulatory system. Strong, reliable capital markets depend on the ability to identify and stop wrongdoers from undermining confidence in the financial system. We need to further strengthen the capacity of regulators to detect and deter fraud.
Non-governmental policy makers should adopt regulatory due process standards that meet or exceed those of government agencies. The debate around financial services regulation and its impact on businesses and our economy focuses on the operations and activities of the multitude of government agencies responsible for regulatory policy and oversight. Several large nongovernmental agencies, however, also have a significant and growing influence on financial services public policy that warrants much closer scrutiny.
These organizations—most notably the Financial Industry Regulatory Authority (FINRA), the Self-Regulatory Organization (SRO) for securities firms, and Institutional Shareholder Services (ISS), the influential for-profit proxy advisory firm—fulfill many functions of government agencies and have either explicit or implicit delegated authority from government. Despite their tremendous influence over the workings of the capital markets, these organizations are generally subject to few or none of the traditional checks and balances that constrain government agencies. This means they are devoid of or substantially lack critical elements of governance and operational transparency, substantive and procedural standards for decision making, and meaningful due process mechanisms that allow market participants to object to their determinations.
Fair and consistent enforcement of the law and reasonable opportunities for private parties to seek redress for intentional or reckless violations of the law are fundamental parts of our financial regulatory system. Strong, reliable capital markets depend on the ability to identify and stop wrongdoers from undermining confidence in the financial system. We need to further strengthen the capacity of regulators to detect and deter fraud.
Nicholas J. Guiliano, Esquire, Guiliano Law Firm, P.C. Practice limited to the representation of investors in arbitration claims against stockbrokers for fraud, the sale of unsuitable investments, breach of fiduciary duty, failure to supervise. National Practice. Contingent Fee. Free Consultation. (877) SEC-ATTY.
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