The Securities and Exchange Commission (SEC) is taking a tougher stand. Prompted in part by an SEC commissioner’s recent complaint that the Financial Industry Regulatory Authority (Finra), which is overseen by the SEC, has been too lenient, Finra may opt for stricter penalties.
It comes as Finra has yet to discipline any Wall Street executives since the financial crisis – some five years ago. Finra regulates more than 4,100 brokerage firms and over 600,000 individual brokers. The Wall Street Journalhas estimated Finra issued fines of $1 million or more 55 times through 2013. The SEC issued such fines 259 times during the same period. To be fair, the SEC is responsible for more serious cases than Finra.
In May, Kara Stein, an SEC commissioner, told Finra employees its enforcement actions were "too often financially insignificant for the wrongdoers,” The Journal reported. The newspaper has estimated that Finra imposed $74.5 million in penalties during 2013, which works out to only 2% of the SEC's $3.4 billion in fines for the financial year.
Meanwhile, SEC Chairman Mary Jo White wants to see greater transparency in the bond market. On Friday, she outlined in a speech how information about supply and demand in bond markets should be more available to investors, The Journal said. "This potentially transformative change would broaden access to pricing information that today is available only to select parties," she said. The SEC also wants to work with Finra on a rule about “best-execution standards for municipal bonds” and new rules on disclosing "markups," which brokers add to trades in municipal and corporate bonds.
Her statement on bonds comes two weeks after White announced she wants more oversight of computer-driven trading and more scrutiny on high-frequency traders, The Journal reported.
You have an interview for a job in banking and finance. Aside from polishing your shoes and memorizing every element of your resume, why not become fluent in power jargon?
Barclays is being generous to the senior bankers it’s laying off, including its head of rates trading in New York.
The Commodity Futures Trading Commission is trying to come up with a new rule constraining speculators, with the current version now totaling 163 pages. Recently, the commission has attempted to define “hedger” and “speculator” as they relate to U.S. commodities markets, and met with traders and lawyers recently to refine the meanings.
Conor McCarthy has been named chief financial officer at ConvergEx Group, a NY-based provider of brokerage and trading-related services. Previously, McCarthy was CFO – Americas for global institutional brokerage at GFI Group.
Philip Falcone is one of five directors to leave the board of LightSquared, a bankrupt wireless Internet company. Earlier, Falcone had stayed on the board, despite pressure for him to leave, because he had invested close to $3 billion in clients’ assets in the company.
Fidelity Investments recently held a conference attended by venture capitalists, alternative financiers and crowd-funders to encourage entrepreneurs to use Fidelity’s customers for IPOs. Fidelity does not plan to become an underwriter, but it has some 20 million customers, many of whom may want IPO shares.
This past weekend was scheduled to be the time for the RBC Decathlon held at St. John’s University. The event, which benefits cancer research, includes financial professionals, with some who were once Yale and Harvard football rivals, such as: former Eli football captain Tom McCarthy, now a fixed-income sales analyst at Morgan Stanley, and Collin Zych, an associate at Cogent Partners in Dallas, who was once Harvard’s football captain.
Buzz Around the Office
Riot Games, the game maker, will pay employees as much as $25,000 to quit their jobs — if they are unhappy there.
Under the company’s formula, employees can get up to 10% of their salary, with a cap at $25,000.
“This is good for the company, and good for the professional,” the company said in a blog post. “We’ll learn from this and make better hiring decisions as a result.”
There is one caveat: the offer has to be selected within the first 60 days of employment.
In comparison, Zappos now pays employees $2,000 if they quit and Amazon pays $5,000 if they quit that company.
Quote of the Day
“There is a Japanese proverb that literally goes 'Raise the sail with your stronger hand,' meaning you must go after the opportunities that arise in life that you are best equipped to do.”
- Soichiro Honda