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In 30 years I've seen plenty of people crammed into securities just because that's what the guy they were talking to happened to be selling. FINRA and the NASD before them have completely gone off the reservation. And yet with all the compliance and email monitoring and blotters and reams of paperwork and new account forms and firm element and field audits and prior materials approvals and web site oversight and needing to know if I serve on my homeowners association board and whether I coach a little baseball team and all the rest... has done NOTHING to protect consumers from bad securities salesmen. What it HAS done is to drive many good people out of the securities industry.
Madoff should have been caught several times, but the compliance investigators were too busy asking some schlub why he didn't forward an email to their supervising principal.
You can no more legislate ethical business practices than you can morality.
Id agree. We need a regulatory system that is focused on fraud and suitability. Not one that is focused on process and paperwork.
Part of the problem we have with the SEC investigators is that their average career lasts about 4 to 5 years (actual stats from the SEC).
Then they are recruited by the investment banks and hedge funds to be compliance officers; so they go from a $100K/year salary to a million dollar salary...
Why would they aggressively investigate their future employers?
In Great Britain investigators are paid on a commission basis.
I forget what the exact percentage is, but its something like 10% or so that they get of the recovered assets.
Madoff said multiple times that it was pretty obvious what he was doing.... think about how much more quickly he would have been caught if the investigators where more worried about a 10% cut of a billion dollars, instead of worrying about working for the guy in a few years...
Our regulatory system is not only backwards, but its borderline corrupt.
None of this changes the fact that having a securities license will give you the ability to provide a more comprehensive service to clients; compliance has nothing to do with it.