October 18, 2008 (FinancialWire) — No doubt, the development of FINRA’s findings and finings totaling $2,145,000 against 25 broker-dealer firms, for failures related to their completion of FINRA’s (then NASD’s) firm self-assessment of mutual fund breakpoint discount compliance, Citigroup Global Markets, a subsidiary of Citigroup (NYSE: C), incurring $2 million in FINRA fines for a range of trading violations, and Morgan Stanley (NYSE: MS) taking a $7 million hit from FINRA charges relating to misconduct in an early retirement investment promotion, was a difficult pill to swallow or those who care about the integrity of our financial system.

Since then, newer, equally troubling developments are emerging, and a recent blog post by Bud Burrell is finging those developments equally difficult to swallow.

From Burrell’s post:

“This week, an 80 page internal report of the behavior of Dallas and New York FINRA staff members in actively protecting and shielding Sir Allen Stanford and his billion dollar Ponzi scheme was leaked by unidentified sources. This sickening report drove home the total absence of internal controls at FINRA related to discovering and acting on massive frauds for which they were given nearly untold numbers of signals that should have prompted their action against such parties. Near the end of the report, it was stated that the behavior of FINRA was essentially identical with regard to Bernie Madoff’s Registered Investment Advisor and his related broker-dealer.

“Some years ago, I had the chance to see a brilliant and upcoming 18 year old comedian at “Catch a Rising Star”. He wrecked the audience with the description of his multi-ethnic background, saying his mother and father, who were from different ethnic groups, had met each other on the subway picking each others’ pockets…”

And the post continues.

Burrell’s entire Investrend Weblogs post is accessible via the Investrend weblogs website (http://www.investrendweblogs.net).

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