A senior banker put it to me more bluntly: “I can find a way to say that virtually any trade we make is somehow related to serving one of our clients. They can go ahead and impose the rule on Friday, and I can assure you that by Monday, we’ll find a way around it. Nothing will change unless the definition is ironclad.”

Andrew Ross Sorkin, Deal Book Colummnist. New York Times article "Bankers in Davos Seek a United Message on Volcker Rule". February 1, 2010

Alliance For Economic Stability

Home U.S. SEC Initiative SEC Ethics and Conflicts Reports
SEC Reports
Alliance for Economic Stability Investigates SEC Chairman’s Violations of President Obama’s Executive Order on Ethics.
May 26, 2010

The Alliance for Economic Stability (AES) is investigating violations of President Obama’s executive order on ethics by the Securities and Exchange Commission ("SEC") Chairman Mary L. Schapiro.

 
Mary Schapiro’s Conflicts of Interest and Multi-Million-Dollar Annual Compensation for Regulatory Work.
May 26, 2010

SEC Chairman Mary Schapiro earned a multi-million-dollar salary performing regulatory work as a FINRA executive. From 2002 to 2008, Schapiro earned $1.2 to $3.2 million per year as a FINRA executive. Her current salary heading the SEC, which oversees FINRA, is less than $200,000. FINRA is a private organization that performs regulatory work assigned by the SEC. FINRA is also overseen exclusively by the SEC. Schapiro has been listed by Washingtonian Magazine as the fourth richest member of the Obama administration, with up to $41 million in assets, but Schapiro’s fortune came entirely from working as a regulator, unlike any of the other richest administration officials listed in the article.

 
SEC Chairman Mary Schapiro’s Questionable Conduct
April 22, 2010

Mary Schapiro, the current Chairman of the Securities and Exchange Commission, was discovered to have lied and made material misrepresentations in her role as head of FINRA, the private regulator overseeing broker-dealers. The discoveries were made in a lawsuit[1] filed against FINRA and Schapiro by a brokerage firm that is a member of FINRA. The documents and court record in the suit show that FINRA executives lied to FINRA members both verbally and in a written proxy statement surrounding the payment of $35,000 to FINRA member firms. FINRA is a regulator of securities broker-dealers, which Schapiro ran until her appointment to the SEC in early 2009. Though FINRA is not part of the government, it is given government power by, and is subject to oversight by the SEC. The misrepresentations surrounding the $35,000 payment to FINRA members were made as part of the merger of regulators where the NASD and NYSE Regulation merged to form FINRA in 2007. To have FINRA members sign off on the merger, FINRA paid out $35,000 to each FINRA-member firm. FINRA stated in its proxy statement, and FINRA’s officers including Mary Schapiro stated verbally, that it could not pay more due to an IRS ruling.

 
Schapiro’s Testimony on Lehman Accounting Trick Omits Mention of FINRA's Central Role
April 22, 2010

In Congressional testimony on March 17, 2010 and again on April 20, 2010, Securities and Exchange Commission Chairman Mary Schapiro commented on the SEC's failure to uncover Lehman Brothers’ use of irregular accounting with its “Repo 105” program. While Schapiro derided the SEC’s oversight of Lehman, she did not mention the lapse in oversight of Lehman’s accounting by FINRA, the quasi-governmental financial regulator where Schapiro was CEO during 2007 and 2008, when Lehman was implementing Repo 105.The Report of the Examiner on the Lehman case before the U.S. Bankruptcy Court (“Examiner Report”) states that Lehman used Repo 105 “to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008” by hiding its debt. The Examiner’s Report also states, “[A]lthough Lehman had in effect borrowed tens of billions of dollars in these [Repo 105] transactions, Lehman did not disclose the known obligation to repay the debt.” Schapiro stated that the SEC had failed to uncover that Lehman was understating its debts, blaming one SEC oversight program for being "inadequately staffed," and stating that its personnel were "ill-suited," according to Schapiro’s testimony before the House Appropriations Committee’s Subcommittee on Financial Services while not mentioning FINRA.

 
Alliance for Economic Stability Urges Financial Crisis Inquiry Commission to Investigate FINRA.
April 12, 2010

The Alliance for Economic Stability (“AES”) today released publicly a letter to the Financial Crisis Inquiry Commission (“FCIC”), a body set up by the U.S. Congress to investigate the causes of the financial crisis, urging an investigation of FINRA, a self-regulatory organization.

 
AES Launches Its “America Must Know Its Entrepreneurial Regulators” Campaign.
April 07, 2010

The Alliance for Economic Stability, Inc. (“AES”), a non-profit economic policy organization whose web site is located at www.eally.org and www.eallies.org, has launched a media campaign called “America Must Know Its Entrepreneurial Regulators,” in response to comments in a Reuters article published April 1, titled “Wall St Watchdog Won’t Roll Over: FINRA CEO.”

 


Contribute Today

Your support allows AES to continue to conduct independent research and investigations of the Regulatory Systems that allowed for the economic crisis. Thank you for your contribution.

Amount:   USD

Who's Online

We have 35 guests online

Share with others