Attorney Richard Greenfield Brands Mary Schapiro and FINRA Execs as “Liars”
By Larry Doyle on October 20, 2009 at 9:45 AM in Economy, FINRA, SEC, Sense on Cents (Larry Doyle blog), Wall Street
Is Mary Schapiro a liar? Are other FINRA executives also liars?
Fully appreciating that merely asking these questions is aggressive by its very nature, I do not ask them in a derisive fashion. The fact is, the answer to those questions in the eyes of Richard Greenfield is an unequivocal, “Yes!”
Who is Richard Greenfield? I had the distinct pleasure of chatting with Richard last evening on my weekly Sunday evening radio program. Richard Greenfield of Greenfield & Goodman is an attorney with over 40 years of experience in banking, securities, and consumer litigation. Amongst other legal venues, Attorney Greenfield has been admitted to practice before the Supreme Court of the United States.
Our conversation last evening was riveting. If you have an interest in the markets, our economy, developments on Wall Street and in Washington, I strongly encourage you to listen to the interview in its entirety. I will share with you some of the highlights which Richard provided. (The timing I provide for these highlights can be used in the audio player provided here.)
> 16:40: FINRA’s mindset has never been on major league enforcement, but rather relatively picayune broker-dealer violations and even then the violations are more technical than they are real. Greenfield said, “the big boys always seem to get away with murder.”
> 18:30: The NASD coming out of the 1930s initially did a good job, but over time it became less and less concerned with enforcement and more concerned with the appearance of enforcement.
> 20:00: Most state attorneys general don’t have resources to devote to securities regulations. It’s the rare state, California and New York for example, which undertakes real enforcement activities. (LD’s comment: I would add that Massachusetts has also aggressively undertaken serious enforcement of securities regulation.)
> 22:00: Too Much Wall Street money finds its way into campaign warchests with the result that its special interests rival those of the insurance and defense industries and as a result Congress and many state government initiatives have been subverted.
> 25:00: Every major financial institution has ‘cooked their books’ for the last five years.
At the 29 minute mark or thereabouts, our conversation truly elevates from the general nature of financial regulation to the very specific details of the cases Richard Greenfield and colleagues from the Washington D.C. based firm of Cuneo, Gilbert, and LaDuca are bringing against FINRA. I STRONGLY encourage you to listen to the next twenty minutes.
> 29:30: Greenfield provides background information on the complaint filed on behalf of the California based FINRA member firm, Standard Investment Chartered against FINRA.
> 32:00-44:00:
- Greenfield comments on some interesting connections between Bernie Madoff and Mary Schapiro, former head of FINRA and current head of the SEC.
- Documents provided by the NASD (now known as FINRA) to Greenfield and his colleagues show unequivocally that the NASD defendants lied to the NASD member firms regarding distribution of funds from the sale of the Nasdaq. Greenfield reiterates that these individuals lied blatantly and unequivocally. They intentionally lied. The lies are repeated over and over in a proxy statement provided to the member firms. The lies were repeated at roadshows which took place all around the country.
Who is they? Who lied? Who repeated the lies?
Mary Schapiro and senior officers in the NASD (FINRA)!!!
> The primary lie is the misrepresentation of the maximum proceeds that could have been paid to the NASD member firms. That figure was represented as being $35k when in fact it could have been much, much higher.
> Greenfield also highlights the fact that FINRA failed to perform in protecting investors from the Auction-Rate Securities scandal while liquidating its own ARS investment position in 2007.
> Greenfield sheds some light that he believes New York AG Andrew Cuomo is investigating FINRA’s liquidation of its Auction-Rate Securities investment.
>47:00
- Greenfield repeats his assertion initially made on September 3rd while appearing on America’s Nightly Scoreboard on Fox Business News (video clips can be seen here) that, based upon information and belief obtained from a source which Greenfield and colleagues believe to be reliable, FINRA had made investments with Bernie Madoff!!
- Greenfield believes that FINRA may have to be disbanded and the self-regulation of Wall Street may have to be scrapped because the self-regulatory model for this industry has failed.
- Greenfield concludes that Mary Schapiro talks a tough game, but is truly a non-regulator.
While Greenfield makes some serious allegations and charges in the course of this interview, he has unquestioned credibility and experience which comes from 40 years of fighting these battles.
Will the truth and transparency being sought in these complaints and which the American public so badly needs at this time come out? Do not discount the power of information. Please share this information which Richard Greenfield so descriptively and professionally detailed last evening with your friends and colleagues.
I thank you.
Questions, comments, constructive criticisms always appreciated.
LD
(Release: November 13)
on sale for only $16.95.
has a spatula.)
And check out these: 
("This crazy redhead is on to something. Her pink Rambler story alone is worth the price of the book," writes 
- “Richard Sale’s reportage on Washington, the CIA, the American armed forces, and foreign intrigue has created a perfect background for this account of the steady growth of President Clinton as a master of the game of nations.”--W. Patrick Lang, former head of Middle East Operations, DIA
"Anne C. Heller's stunning biography of Ayn Rand" uses a "plethora of newly unearthed research and fresh insight."
Great job Larry, as always! Since I don’t have time to listen to the whole thing I really appreciate you highlighting the key points.
With so much blatant lying going on in the areas of economics and politics the TRUST of the people is being sorely challenged. When a society loses trust in it’s leaders and institutions and feels disempowered to do anything about that, it’s decline is ensured.
Larry thanks for highlighting the salient points.
It makes an intriguing story. Since everyone I seem to know has lost between 40-60% of their 401K’s in these financial disasters, one can only hope that some day the entire story becomes well known and publicized.
Justice truly need to be done, so there will be no attempts at repeats.
Larry,
As usual, your posts are so interesting to me, a total moron when it comes to Wall Street. I would love to pass this along to people, but most of my friends are like me. I had little–except for my retirement funds from a public job–in Wall Street. Now all the younger, unretired people will be having to make the greater sacrifices to make up for those losses, as retirees are protected to some extent. I never followed Wall Street, most of its jargon (especially all those entities mentioned as acronyms). But I am extremely interested now because my two sons are not in public jobs, have 401k accounts.
How could someone like me help? Push for Schapiro’s ouster (I’m still dumbfounded by her appointment for COO)? Push for an investigation? Push to really end FINRA? Are there organized efforts to do these things?
Diana, those are good questions. I’m naive about wall Street machinations, too, but I want to learn. As for explaining it to friends and family, I find most people have short attention spans and aren’t so interested in details unless it applies to them. Is there a succinct way to make it relevant on Main Street?
Diana,
I think the best way to help is merely spreading the word. How does one do that? Forward my commentary to friends, families, colleagues. Additionally have people read all of my work which is at Sense on Cents and can be easily accessed via the window here at No Quarter.
Information is everything.
Today’s news:
State Street Sued: Jerry Brown, California AG, Sues Bank For “Unconscionable Fraud”
http://www.huffingtonpost.com/2009/10/20/post_268_n_327261.html
Jerry’s the front runner for Governor. Lets hope this sends a signal to Washington.
Is that the same Jerry Brown who was governor there in the 60’s or 70’s? Wasn’t he a flake?
Ellen D, the CA AG Jerry Brown is leading?
Last poll I saw. His Dem opponent is Gavin Newsom, Mayor of San Francisco but he’s regarded as too left wing. The likely Republican is Meg Whitman from eBay who is regarded as too right wing. That positions Jerry in the center.
No, Portia, he wasn’t a flake, but his opponents had fun calling him “Governor Moonbeam”. He was remembered for not moving into Reagan’s Governor’s mansion which he called “Like living in a Safeway”, and preferring a smaller place. Earlier in life he trained to be a Jesuit. Later in life he married.
He also dated Linda Ronstadt at one time.
Gosh, what a shock! Self-regulation has ALWAYS worked so well!!! Please don’t tell me about the tooth fairy and Santa, I just can’t take any more disillusionment!!
Larry, I shared this with dailybail.com They are reaching thousands daily, so I hope it helps.
Thanks for the outstanding work.
SNK….Thanks. Hopefully they will pick it up and continue to spread the word.
This story deserves it.
i think he just might win this..