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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, October 2, 2009

FINRA's Special Review Committee Issues Report on Failures to Detect Madoff and Stanford Frauds

FINRA released on its website a Report of a Special Review Committee established to look into why FINRA did not protect investors against the Madoff and Stanford frauds, as well as the transmittal letter from Rick Ketchum to David Becker, General Counsel and Senior Policy Director of the SEC.  In the cover letter, FINRA predictably makes reassurances that it is already doing better and has enhanced its examination programs and procedures for detecting fraud, as well as setting up an Office of the Whistleblower and an Office of Fraud Detection and Market Intelligence. 

The Special Report includes a number of recommendations, including the sure-to-be-controversial finding that FINRA is "fundamentally hampered" because it does not have jurisdiction over investment advisory activities.

http://lawprofessors.typepad.com/securities/2009/10/finras-special-review-committee-issues-report-on-failures-to-detect-madoff-and-stanford-frauds.html

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