Reuters announced today that while it did not publicize the change, the Financial Industry Regulatory Authority (FINRA) launched an effort earlier this year to fast-track investigations and disciplinary cases involving risky brokers who may pose the greatest threats to the investing public.
According to the article, “Brokers who already have an extensive disciplinary history with numerous substantive complaints could be barred from the industry more quickly as a result of the change,” according to Susan Axelrod, the head of regulatory operations for FINRA.
According to FINRA
Problem brokers come to FINRA’s attention through customer complaints and routine regulatory examinations of brokerages and their branches. The change came after FINRA noticed that ongoing investigations involving individual brokers had increased to more than half of all investigations.
From Experience
We (Guiliano Law Group) know from our own practice that once we file a Statement of Claim before FINRA arbitration seeking monetary damages on behalf of injured customers, we may get a perfunctory call from someone at FINRA allegedly investigating our case. We always encourage our clients to cooperate and be forthcoming with regulators, and despite often silly and irrelevant questions by generally inexperienced investigators such as did the customer look at their statements, or have other investment experience, we very rarely see FINRA ever take action against a wayward or rogue broker, and when they do, it is generally long after the customer case has settled, which does not help the investor in their civil arbitration case, and the penalties and settlements effected by Letters of Acceptance, Waiver and Consent with the offending brokers, are often slight representing only pennies on the dollar, which of course, the investor never see a dime.
The Reuters states that the secret program came to light less than three weeks after FINRA filed a civil enforcement complaint against a Beverly Hills-based broker, Bambi Holtzer, who racked up 64 complaints over 30 years from customers alleging sales practice violations, most of them after 2001 because Holzer sold seven investors privately issued securities that later turned out to be fraudulent and lied in regulatory documents.
Purportedly, that action came after years of criticism from investors’ lawyers that FINRA allowed Holzer to continue working in the securities business, despite the mounting complaints. However, in fact, the action appears to be the result of a letter written to FINRA on October 25, 2013, Senator Edward J. Markey (D Mass) to FINRA Chair and CEO, Richard G. Ketchum asking FINRA to address the concerns that each year more than $50 million of arbitration awards are unpaid, because the offending brokerage firm closes it doors, and like rats on a sinking ship, the rogue brokers migrate to a new boiler room.
Guiliano Law Group
If you have been the victim of securities fraud you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.
