Deadlines, schmeadlines

Pressed on last year’s record-low number of enforcement actions against misbehaving brokers and dealers, the Financial Industry Regulatory Authority’s defence that previous crackdowns meant there were simply fewer bad actors left to fine was never likely to wash with longtime critic Elizabeth Warren.

In late-August, Senator Warren questioned whether Finra had “lost sight of its mission” to protect investors and promote market integrity, fulminating that “financial crimes cannot be prevented if you take the cop off the beat”. (We covered her letter to the self-regulatory body here.) 

Warren ended her latest broadside with a detailed but far from onerous list of questions and a request that Finra respond in the next 16 days, no later than September 13. When it became clear this deadline would pass without a reply, the Senator’s office gave Finra a short extension to the end of last week. 

Alas, Warren’s office still hasn’t heard a peep, according to a person familiar with the matter. Which means we’re no closer to learning what evidence Finra has to substantiate its bold claim that US capital markets have never been safer. 

We asked Finra why, after a month, it had yet to get back to Warren — to which a spokesperson replied:

We are keeping the Senator’s office updated. I have nothing further at this time

We also emailed Dennis Kelleher of Better Markets for his thoughts, and as expected he was more voluble:

FINRA’s enforcement actions plummeting to the lowest level in its history proves yet again that industry self-regulation does not work, and its failure to respond to important, legitimate questions proves it must be made more accountable, including much greater Congressional and SEC oversight.