Finra seeks faster fraud fighting, fewer "bodies"

* Finra fraud detection, enforcement must work faster

* Watchdog will cast wider net, focus on riskiest areas

By Joseph A. Giannone

BALTIMORE, May 26 (BestGrowthStock) – Bernie Madoff did not attend
the Financial Industry Regulatory Authority’s annual conference
Wednesday, but his presence loomed large as the markets
watchdog listed a host of new measures to fight investor
fraud.

Finra Chief Executive Richard Ketchum told hundreds of
industry executives gathered in Baltimore that the regulatory
body is casting a wider net when examining firms, working more
closely with states and other watchdogs, and focusing its
attention on the riskiest activities.

Most of all, fraud detection and enforcement efforts must
move much faster, he said.

“We need to be out of the business of sweeping up bodies
and in the business of getting involved before too many
investors get hurt,” Ketchum said. “We’ll focus on the speed
and efficiency with which we bring enforcement actions. Quicker
actions mean more investors escape harm.”

Madoff, who bilked investors of $65 billion before his sons
blew the whistle on his deacdes-long Ponzi scheme late in 2008,
was not mentioned by Ketchum. Yet the measures the Finra chief
described fill gaps that critics of Finra and the U.S.
Securities and Exchange Commission contend would have protected
thousands of investors in the past.

Among other things, Finra is gathering more information
about a firm’s affiliates and subsidiaries, including “any
advisory business conducted by the firm,” and individuals.
Finra also will identify potential conflicts of interest.

“When a firm acts as both adviser and a broker to
customers, firms have a higher level of control over customer
assets,” Ketchum said.

Finra also will examine links between brokers and various
feeder funds.

Ketchum said Finra will be taking a harder look at
companies’ statements and taking steps to verify them. Account
statements will be checked, including speaking directly with
customers.

Stock Investing
(Reporting by Joseph A. Giannone; editing by John Wallace)

Finra seeks faster fraud fighting, fewer “bodies”