August 30, 2010

Securities Broker-Dealers Indicate Dissatisfaction with FINRA Ombuds

Last week, securities broker-dealers elected three dissident representatives to the Financial Industry Regulatory Authority's governing board. The move signaled widespread unhappiness with the regulator's policies and practices. One industry expert said that broker-dealers are not satisfied with the results they get from FINRA's Ombudsman.

Ken Norensberg, head of Four Points Capital Partners in New York told Reuters that FINRA's members are "extremely frustrated" by the lack of information available and their inability to reach top officials about grievances.

Brokers at FINRA's annual meeting also approved, by a wide margin and over FINRA's objections, seven proposals to increase accountability including an external inspector general. FINRA opposes these changes and believes an independent watchdog would be unnecessary because it already has an internal audit department and an Ombuds program. None of the press coverage has indicated particular complaints about the FINRA Ombuds program. (Reuters; Project on Government Oversight; Enjoy Mediation.)

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