Is Mary Schaprio’s Reign Of Negligent Incompetence About To End?
Courtesy of Tyler Durden at Zero Hedge
The Syndicate Encouraging Corruption lately has been far more busy begging for money from the Tim Geithner’s gargantuan budget than performing any enforcement, analysis, or regulation, case in point today’s second attempt to kill any investigation into the ML/BAC merger. We hope some Congressional or Senate committee will finally find the guts to subpoena any and all communication between BACML, or any other banks, and the SEC related to this proposed settlement, to uncover just what the SEC’s motives are to fast-lane yet another case involving the endless corruption on Wall Street. Luckily Cuomo is still there to pursue the punishment of real wrongdoing, since America is now completely unable to rely on the $1 billion publicly funded organization, which, at least on paper, "works in American investors’ interest"… and by American investors we assume the agency does not refer to Goldman Sachs or Bank Of America. Yet judgment day for Mary Schapiro may soon be coming. Larry Doyle at Sense on Cents notes that next week FINRA’s board of directors will finally address alleged wrongdoings by Schapiro. We join Larry in asking: "Will the Board realize it ultimately needs to be accountable to ALL its member firms and, by extension, to the American public at large? Will the Obama administration compel the Board to provide the transparency America so badly wants?"
A summary of the case against Schapiro is presented below. Should justice be served, the Board will find that Mary Schapiro, even more so than her clueless predecessor Chris Cox, is the most incapable person to head the investor-protection agency in the history of the SEC, and should not only be immediately fired, but should see her excessive compensation and pension benefits from her ineffectual years at FINRA be clawed back with extreme prejudice.
FINRA BOARD TO CONSIDER ALLEGED WRONGDOING BY FORMER CHAIR MARY SCHAPIRO AND HER COLLEAGUES
Feb. 10 Closed Door Board Meeting to Consider Broker-Dealer’s Allegations
WASHINGTON, DC, February 4 — On February 10, 2010, the Board of Governors of the Financial Industry Regulatory Authority, Inc. (“FINRA”) will consider allegations of gross mismanagement set forth in a December 4, 2009 letter to the Board on behalf of Amerivet Securities, Inc. (“Amerivet”), a member of FINRA.
The letter demands that FINRA take action against Mary Schapiro and other senior FINRA executives to recover excessive compensation and unprecedented portfolio losses stemming from FINRA’s dismal 2008 regulatory and investment performance. In 2008, Ms. Schapiro’s last year as FINRA chair, that organization:
Failed to act against Bernard Madoff and Robert Allen Stanford, who perpetrated two of the largest Ponzi schemes in history;
Failed to act against large FINRA members Lehman Brothers, Bear Stearns and Merrill Lynch in connection with their roles in the subprime mortgage securities scandals;
Failed to warn investors about Auction Rate Securities (ARS) problems, after FINRA had liquidated its own ARS holdings in mid-2007, but before the ARS market “froze” and there were any public disclosures about the risks inherent in such “investments”;
Suffered nearly $700 million in loses;
PAID ITS SENIOR EXECUTIVES NEARLY $30 MILLION.
Broker-Dealer: “Schapiro and Colleagues Bilked FINRA of Millions”
Amerivet principal, Lt. Col. Elton Johnson (U.S. Army Reserve), an Iraq War combat veteran, stated:
“Despite President Obama’s call for accountability for wrongdoing, past and present, Mary Schapiro and her colleagues have thus far gotten away with bilking FINRA of tens of millions of dollars in 2008, even as that self-regulatory organization failed in its fundamental responsibility to protect investors, and FINRA sustained nearly $700 million in financial loses. It is ironic that Mary Schapiro received a salary more than 15 times that of a four star general, while FINRA was, by any measure, failing miserably.”
Whistleblower: FINRA “Definitely In Bed With Industry”
During his 2009 testimony, Madoff whistleblower Harry Markopolos told Congress that FINRA is “definitely in bed with the industry” and “[gets] an A+ for corruption.” Separately, a report from SEC Inspector General David Kotz quotes Bernard Madoff as referring to Ms. Schapiro as a “dear friend.”
Attorney Richard Greenfield added:
“The excessive compensation packages for the FINRA self-regulatory executives who failed to regulate represent cynical and hypocritical examples of the incestuous Wall Street-Washington relationships that have incensed voters across the United States.”
Amerivet is a small broker-dealer located in Moreno Valley, California and a member in good standing of FINRA. Lt. Col. Johnson has been an officer in the United States Army Reserve for 24 years. He has completed two tours of duty in Iraq, he is currently on active military duty at Fort Irwin, CA, and he will soon begin preparations for deployment to Afghanistan later this year.
Regular readers are well aware of our extreme appreciation for the immense amount of wonderful work Mary Schapiro has done not only while at Finra but at the SEC as well. For newbies, we recommend perusing some of the articles in the following link.
