Susan Merrill, the head of enforcement at the Financial Industry Regulatory Authority (FINRA) is departing after nearly three years in which disciplinary actions and fines against the brokerage industry have declined, reported Sue Craig of the Wall Street Journal in her March 18 article, “Finra’s Susan Merrill to Exit as Enforcement Chief.”
FINRA is reportedly looking for a replacement to bolster its reputation and bring more cases. FINRA and other regulators have been justly criticized for missing some of the major frauds associated with the financial crisis as well as other investment frauds.
While Ms. Merrill brought a number of auction-rate-securities cases against Wall Street firms, many appeared to have been brought only after state regulators did all the work. During Ms. Merrill’s tenure, her division has brought fewer disciplinary actions than her predecessors did, and the cases it brought were typically against small players. Simply put, FINRA has failed to address the vast abuses that led to the financial crisis and has failed to adequately investigate Ponzi schemes run by Bernard Madoff, among others.
During recent years, FINRA enforcement has been abysmal at best. Meanwhile, much of Wall Street has acted like a Barbary Coast of financial pirates. Change is needed if we are to protect the integrity of our financial system.
Ms. Merrill was paid $1.4 million in 2008, according to the article. No departure date has been announced.
