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Reuters – Two employees of Allen Stanford’s financial business, which U.S. regulators have accused of massive fraud, held advisory roles at a watchdog group overseeing U.S. broker-dealers aimed at preventing abuses.
Lena Stinson, director of global compliance at Stanford Financial Group, served on the membership committee of the Financial Industry Regulatory Authority, or FINRA, which describes itself as the largest independent regulator of U.S. securities firms.
Frederick Fram, the chief operating officer of Stanford Group Holdings, served on the FINRA continuing education content committee, "where he participates in creating material for the Regulatory Element continuing education program," according to a biography on Stanford’s website.
The Stanford executives resigned from their posts last week at FINRA’s request, Brendan Intindola, a FINRA spokesman, said.
Stanford Group Co is a member of FINRA. Calls to Stanford’s Houston offices were not answered.
The firm referred all press inquiries to the U.S. Securities and Exchange Commission, which last week accused the Texas billionaire and two of his associates of a "massive ongoing fraud" related to the sale of $8 billion in certificates of deposit.
New York (HedgeCo.Net) – Mary Schapiro, who most recently was the CEO for the Financial Industry Regulatory Authority, is now the head of the Securities and Exchange Commission. The Senate approved Schapiro yesterday, a month after being nominated President Barack Obama.
Schapiro takes over the SEC at a crucial time, when the agency along with former head Christopher Cox received an abundance of bad press over lax regulation in a faltering economy.
In a year where hedge funds have taken a beating and some of the world’s most reputable financial institutions have come crumbling down, all eyes are on the SEC as to how and why they could not prevent or foresee disaster.
Even as more light is shed on the Bernard Madoff debacle after losses amounting to over $50 billion, questions still arise as to how the agency could have missed the pink elephant in the room. Schapiro, who has taken flak for clearing Madoff from fraud, says that the broker dealer watchdog did not have the jurisdiction to investigate his investment advisory business.
Many are suprised at the appointment of Schapiro simply because she has been a staple in government regulation agencies since the Reagan era. Some argue that this will not provide the "change" we need, especially since Schapiro was at the center of an agency that many feel is corrupt, or at the least, too forgiving.
Schapiro is the first woman to chair the SEC.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
MSN Money UK – Bernard L. Madoff Investment Securities LLC was examined at least eight times in 16 years by the U.S. Securities and Exchange Commission (SEC) and other regulators, who often came armed with suspicions, the Wall Street Journal said.
SEC officials followed up on emails from a New York hedge fund that described Bernard Madoff’s business practices as "highly unusual," the paper said.
The Financial Industry Regulatory Authority, the industry-run watchdog for brokerage firms, reported in 2007 that parts of the firm appeared to have no customers, according to the paper.
Madoff was interviewed at least twice by the SEC, the paper said, adding that regulators never came close to uncovering the alleged $50 billion Ponzi scheme that investigators now believe began in the 1970s.
