The Securities and Exchange Commission (SEC) was established by Congress in 1934 for the primary responsibility of enforcing federal securities laws. It originally had as its Chairman, industry participants like the first appointee, Joseph Kennedy. More recently, the SEC appoints former US Attorneys who use a rotating door of going from private to public practice. The SEC is known more for the many frauds they didn't catch in time like Bernie Madoff , its internal employees watching pornography, the destruction of "Matters Under Inquiry" records, and the failings of its Inspector Generals Office, than it is for its operations.
The Financial Industry Regulatory Authority (FINRA) regulates the members of the Securities Industry. Their predecessor, the NASD, was established in 1939 to " protect investors by making sure the United States securities industry operates fairly and honestly." What they really are is a private country club and monopoly established for the sole purpose of protecting its largest members. Additionally, they act as gatekeeper in prosecuting small to medium sized businesses for various rules violations, and in the process, raise the barrier to entry in the marketplace, and protect the market share of the industry leaders in a violation of anti competition. In 2012, Finra's budget was about $1 billion dollars, and they took in about the same amount through fines. They are additionally funded by fees and taxes on every single security transaction in the US.
The United States Commodity Futures Trading Commission was established in 1974 by an act of Congress to regulate the futures industry. The template and mandate was basically copied from the SEC. What's ironic is that the mandate states that the CFTC, "protect market users and the public from fraud, manipulation and abusive practices related to the sale of commodities and financial futures and options to foster open, competitive and financially sound futures and option markets." Nothing could be further from the truth. As an arm to protect the richest and the biggest, the CFTC historically beats up on small to medium sized businesses to rationalize its existence to Congress and to transfer wealth from the poor to the wealthy. In almost every year, there is some instance of some very large banks or hedge funds cornering a market solely for its own benefit. One example is the Commodity Modernization Act of 2000 which gave Enron an exemption to monopolize and corner the natural gas markets which resulted in California paying almost triple. It would have not been possible except for the marriage of Wendy Gramm, former Chairperson of the CFTC, and her husband, Phil Gramm, the Senator from Texas who could be argued, authored or co-authored many of the laws that lead to deregulation of the large banks that lead to many financial and commodity crisis's.
According to one of its former attorneys', the CFTC is, "the most corrupt Government agency." In 2009, Gary Gensler became the Chairman for the CFTC. He was undersecretary of the treasury in 2000 when he advocated for the Commodity Modernization Act. With his support of the repeal of the Glass Steagall Act, and then the Commodity Modernization Act, which both lead to the worlds financial crisis in 2008, he then became chairman of the CFTC at a time to enforce the Frank-Dodd Act which would have put more enforcement on regulating large banks. Many of those laws are still not enforced. Gensler will go down in history as one of the biggest hypocrites in financial regulation. The National Futures Association (NFA) is the copy of Finra. It is small, but vicious. Its Chairman and the COO, Dan Roth and Dan Driscoll, established the NFA while working at the CFTC. They are also a monopoly and regularly deny due process. Driscoll in particular, "stacks committees to get rulings he desires." The NFA has never brought any substantial charges against any large bank who dominate the futures industry.
Just like the SEC missing huge frauds, the CFTC and NFA have a couple of huge mistakes. One is which an FCM named Peregrine Financial and its Chairman, Russell R. Weisendorf Sr., actually committed fraud for an astonishing 19 years. Not only did the NFA and CFTC not catch it, but Weisendorf was actually a committee member of the NFA for a number of years. Innocent investors like farmers and pension funds who's only fault was having money domiciled at Peregrine, lost hundreds of millions. Another huge black eye was MF Global and its Chairman, Jon Corzine. Corzine had been a Goldman Sachs partner and Senator from New Jersey before becoming Chairman of MF Global, which had been in existence for decades and was an industry leader. Corzine used the money from innocent investors to gamble in the market. He used sacred non-segregated account money for his bets. If he made a profit, all would go to MF Global. Unfortunately he lost, and all the losses went to investors again who's only crime was having a clearing relationship. For Corzine, it was heads I win, tails I win too. No one from the CFTC answered for the loss of over a billion dollars of lost customer money, destroying hundreds of lives including farmers and retirees. The NFA's role is not even mentioned in any media reports about the incident.
In 2013, the CFTC's budget was $330 million dollars and its lawyers totaled 1200. This is up from a budget of $200 million dollars and 600 lawyers just two years ago. In 2013, the CFTC as of October, brought 82 regulatory cases and $1.7 billion dollars in fines. Only $200 million earmarked towards restitution. Yes, enforcement is big business.
Regulatory Capture is a form of political corruption that occurs when a regulatory agency, created in the name of the public, actually acts in the best interest of the largest interest groups that dominate the industry. In October 2010, an administrative Judge for the CFTC, Judge Painter, wrote an open letter announcing his retirement and stating that the other Administrative Judge, Judge Levine, since 1990, had never ruled in a complainants favor in a promise he made to then Chairperson, Wendy Gramm. In other words, many small victims of large banks and firms who would seek due process, be unknowingly denied due process for twenty years by Judge Levine. As of this date, the only CFTC response to Judge Painter's allegations have been to discredit Judge Painter, and not do a single thing to Judge Levine.
The Financial Industry Regulatory Authority (FINRA) regulates the members of the Securities Industry. Their predecessor, the NASD, was established in 1939 to " protect investors by making sure the United States securities industry operates fairly and honestly." What they really are is a private country club and monopoly established for the sole purpose of protecting its largest members. Additionally, they act as gatekeeper in prosecuting small to medium sized businesses for various rules violations, and in the process, raise the barrier to entry in the marketplace, and protect the market share of the industry leaders in a violation of anti competition. In 2012, Finra's budget was about $1 billion dollars, and they took in about the same amount through fines. They are additionally funded by fees and taxes on every single security transaction in the US.
The United States Commodity Futures Trading Commission was established in 1974 by an act of Congress to regulate the futures industry. The template and mandate was basically copied from the SEC. What's ironic is that the mandate states that the CFTC, "protect market users and the public from fraud, manipulation and abusive practices related to the sale of commodities and financial futures and options to foster open, competitive and financially sound futures and option markets." Nothing could be further from the truth. As an arm to protect the richest and the biggest, the CFTC historically beats up on small to medium sized businesses to rationalize its existence to Congress and to transfer wealth from the poor to the wealthy. In almost every year, there is some instance of some very large banks or hedge funds cornering a market solely for its own benefit. One example is the Commodity Modernization Act of 2000 which gave Enron an exemption to monopolize and corner the natural gas markets which resulted in California paying almost triple. It would have not been possible except for the marriage of Wendy Gramm, former Chairperson of the CFTC, and her husband, Phil Gramm, the Senator from Texas who could be argued, authored or co-authored many of the laws that lead to deregulation of the large banks that lead to many financial and commodity crisis's.
According to one of its former attorneys', the CFTC is, "the most corrupt Government agency." In 2009, Gary Gensler became the Chairman for the CFTC. He was undersecretary of the treasury in 2000 when he advocated for the Commodity Modernization Act. With his support of the repeal of the Glass Steagall Act, and then the Commodity Modernization Act, which both lead to the worlds financial crisis in 2008, he then became chairman of the CFTC at a time to enforce the Frank-Dodd Act which would have put more enforcement on regulating large banks. Many of those laws are still not enforced. Gensler will go down in history as one of the biggest hypocrites in financial regulation. The National Futures Association (NFA) is the copy of Finra. It is small, but vicious. Its Chairman and the COO, Dan Roth and Dan Driscoll, established the NFA while working at the CFTC. They are also a monopoly and regularly deny due process. Driscoll in particular, "stacks committees to get rulings he desires." The NFA has never brought any substantial charges against any large bank who dominate the futures industry.
Just like the SEC missing huge frauds, the CFTC and NFA have a couple of huge mistakes. One is which an FCM named Peregrine Financial and its Chairman, Russell R. Weisendorf Sr., actually committed fraud for an astonishing 19 years. Not only did the NFA and CFTC not catch it, but Weisendorf was actually a committee member of the NFA for a number of years. Innocent investors like farmers and pension funds who's only fault was having money domiciled at Peregrine, lost hundreds of millions. Another huge black eye was MF Global and its Chairman, Jon Corzine. Corzine had been a Goldman Sachs partner and Senator from New Jersey before becoming Chairman of MF Global, which had been in existence for decades and was an industry leader. Corzine used the money from innocent investors to gamble in the market. He used sacred non-segregated account money for his bets. If he made a profit, all would go to MF Global. Unfortunately he lost, and all the losses went to investors again who's only crime was having a clearing relationship. For Corzine, it was heads I win, tails I win too. No one from the CFTC answered for the loss of over a billion dollars of lost customer money, destroying hundreds of lives including farmers and retirees. The NFA's role is not even mentioned in any media reports about the incident.
In 2013, the CFTC's budget was $330 million dollars and its lawyers totaled 1200. This is up from a budget of $200 million dollars and 600 lawyers just two years ago. In 2013, the CFTC as of October, brought 82 regulatory cases and $1.7 billion dollars in fines. Only $200 million earmarked towards restitution. Yes, enforcement is big business.
Regulatory Capture is a form of political corruption that occurs when a regulatory agency, created in the name of the public, actually acts in the best interest of the largest interest groups that dominate the industry. In October 2010, an administrative Judge for the CFTC, Judge Painter, wrote an open letter announcing his retirement and stating that the other Administrative Judge, Judge Levine, since 1990, had never ruled in a complainants favor in a promise he made to then Chairperson, Wendy Gramm. In other words, many small victims of large banks and firms who would seek due process, be unknowingly denied due process for twenty years by Judge Levine. As of this date, the only CFTC response to Judge Painter's allegations have been to discredit Judge Painter, and not do a single thing to Judge Levine.
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