Feds Finally Find Financial Fraud Cases Small Enough to Prosecute

Last Updated Sep 8, 2011 9:21 AM EDT

Finally federal regulators are going after corrupt financial institutions. FINRA has levied fines of nearly $1 million (total) on five broker-dealers who made up for low commissions by overcharging for other fees.
Look out Citigroup (C), JPMorgan (JPM), Wells Fargo (WFC) and company! If you ever get so small you can't buy congressmen and lobbyists by the gross, the feds will be all over you. If that happens you'll get same treatment as Pointe Capital of Boca Raton, Fla. -- now known as JHS Capital Advisors, John Thomas Financial of NYC, First Midwest Securities of Bloomington, Ill., Salomon Whitney LLC of Babylon Village, N.Y., and A&F Financial Securities of Syosset, N.Y. Once they've cracked down on Syosset and Bloomington, can Wall Street be far behind?

Let's be clear: It is a good thing that the Financial Industry Regulatory Authority has gone after firms who screwed over particular little guys. As Dow Jones reported:
The cases resulted from a targeted review of improper fees charged by broker-dealers, and FINRA found that the firms were routinely charging customers for handling fees that far exceeded the actual cost of direct handling-related services the firms incurred in processing securities transactions, the regulator said. In some cases, the firms charged a handling fee of almost $100 per transaction and earned a substantial percentage of their revenue from these fees, it said.
It's just that I'm still waiting for someone to go after the firms who screwed all the little guys. While there are reports that the New York Attorney General is expanding its investigation of Goldman Sachs (GS), I find it hard to get my hopes up.

Look at this post from my BNET colleague Alain Sherter: Feds Are Burying Yet Another Case Of Wall Street Fraud. If that story doesn't get you depressed enough go down to the end and see the list of other stories Alain has done on this topic. And that's just a selection of his most recent stuff. These important stories are a dime a dozen right now.

So FINRA, please forgive us if we're not overly impressed.

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    Constantine von Hoffman is a freelance writer and writing coach. His work has appeared in outlets such as Harvard Business Review, NPR, Sierra magazine, Brandweek, CIO, The Boston Herald, TheStreet.com, CSO, and Boston Magazine.

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