Even as FINRA Lost $696.3 Million in 2008, its Executives Made Millions

Last year, 13 current and ex- Financial Industry Regulatory executives made over $1 million each, even as the regulatory organization posted a $696.3 million loss ($439 million in investment losses). Compensation included salary, retirement plan awards, and bonuses. This data, reported in Investment News, is found in FINRA’s latest tax reforms and annual report. Among the executives who received such hefty compensation in 2008:

• Michael D. Jones, former FINRA chief administrative officer: $4.43 million
• Mary Schapiro, now Former FINRA chief executive officer and now SEC Chairman: $3.3 million and $7.2 million for accumulated retirement benefits
• Elisse Walter, SEC commissioner: $3.8 million
• Douglas Shulman, who left the SEC in March 2008 to become Internal Revenue Service Commissioner: $2.7 million
• Susan Merrill, FINRA enforcement chief: Over $1 million

• Grace Vogel, FINRA member regulation’s executive vice president: Over $ 1 million
All employee compensation packages over $1 million was approved by FINRA’s management compensation committee.

FINRA’s compensation and benefits costs for its 2,800 employees went up 21.4% ($541.7 million) in (2008 from 2007) due to $30.3 million in benefit costs (including severance) from a larger retiree medical and savings plan and a voluntary retirement savings program. Also in 2008, another 400 employees joined FINRA’s payroll because of the company’s merger with NYSE Regulation.

Robert Ketchum, FINRA’s new chief executive , says that like everyone else, the SRO took a serious financial hit because of the credit crisis.

However, according to Shepherd Smith Edwards & Kantas LTD LLP founder and securities fraud lawyer William Shepherd: “This is yet another chapter in the saga of ‘Who regulates the regulators?’ But first, you should know that FINRA is no ‘authority’ at all. Instead it is a non-profit corporation owned by each and every securities firm that it regulates! How many of us are regulated by an ‘authority’ that we literally own? This also means that just before she became Chairman of the SEC, Mary Schapiro received $10 million that was mostly tax deferred as a parting gift from all the securities dealers! Now there’s a real incentive to be tough on Wall Street! Oh, and did I mention that FINRA runs its own ‘court system’ for anyone that wants to sue a broker or securities firm? Sometimes I feel like I live in Oz.”

Related Web Resources:
Finra execs pocketed millions in ’08, while SRO was in the red, Investment News, December 3, 2009
FINRA

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