An irreverent Wall Street Blog
For FINRA, Relevant Is A Large Gray Pachyderm
September 9, 2020
FINRA seems to think that a "relevant" is a gray pachyderm with a long trunk and two large, floppy ears. Dumbo is such a cute character, no? What's not cute is the troubling double standard of FINRA when it comes to disclosing the prior relevant disciplinary histories of its large member firms. For some reason, that disclosure poses a particular challenge for FINRA. Smaller firms and the industry's men and women have their dirty laundry washed in public for all to see; however, when it comes to the big boys, well, FINRA seems to throw the large babies out with the bathwater.
2017 Lynch AWC
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Charles Lynch submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Charles Lynch, Respondent (FINRA AWC 2015045713301 / December 11, 2017) (the "2017 Lynch AWC").
https://www.finra.org/sites/default/files/fda_documents/2015045713301
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The 2017 Lynch AWC asserts that Charles Lynch first entered the industry in 1999 and by October 2012, he was registered with FINRA member firm Wells Fargo Clearing Services, LLC (f/k/a Wells Fargo Advisors, LLC) until his April 12, 2016 termination. The AWC does not indicate whether Lynch had or did not have any so-called relevant disciplinary history, as is often disclosed in an AWC. In pertinent part, the AWC alleges that:
Between November 2012 and October 2015, Lynch and another Wells Fargo representative recommended an investment strategy to more than 50 customers, which was a majority of their customers, causing the customers accounts to become significantly over-concentrated in a single sector of the overall market. The over-concentration primarily involved four speculative equity securities within the energy sector. Due to the speculative nature of the recommended securities, the volatility of the energy market, and the high level of concentration, this strategy exposed customers to significant potential losses. In general, based on those recommendations, most of these customers were concentrated in energy-sector investments, with the majority of those investments concentrated in the four speculative energy securities.
During the relevant period, in many instances, Lynch failed to properly consider and failed to obtain accurate customer investment profile information to determine the suitability of his over-concentration strategy and the securities he recommended as part of that strategy. In this regard, Lynch recommended the strategy to customers without proper consideration of each customer's individual investment experience, risk tolerance, investment time horizon, net worth, liquidity needs, and income. Consequently, Lynch did not properly assess the significant potential risks associated with his recommended strategy for each of these customers. In certain instances, the potential risks were compounded because the over-concentration in speculative energy-sector securities exceeded 50% of the customer's net worth (exclusive of personal residence).
In 2015, when the energy market began a downturn, Lynch unsuitably recommended that certain of his over-concentrated customers adhere to his strategy without regard to their particular situations or ability to continue to sustain losses. By following Lynch's recommendation, the customers suffered millions of dollars in aggregate losses.
In accordance with the terms of the AWC, FINRA found Lynch to have violated FINRA Rules 2111 and 2010, and the self-regulator imposed a Bar upon Frieda from associating with any FINRA member firm in any capacity. The AWC does not disclose any legal counsel for Lynch.
Online FINRA BrokerCheck records for Lynch as of August 31, 2020, disclose 59 items under the heading "Customer Dispute - Settled." BrokerCheck discloses one item under "Customer Dispute - Closed-No Action/Withdrawn/Dismissed/Denied." Finally, BrokerCheck discloses that Lynch was granted a Bankruptcy Discharge/ Chapter 7 on July 24, 2017.
2017 Frieda AWC
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Charles H. Frieda submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Charles H. Frieda, Respondent (FINRA AWC 2015045713302 / December 11, 2017) (the "2017 Frieda AWC")
https://www.finra.org/sites/default/files/fda_documents/2015045713302
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The 2017 Frieda AWC asserts that Charles H. Frieda first entered the industry in 2008 and by October 2012, he was registered with FINRA member firm Wells Fargo Clearing Services, LLC (f/k/a Wells Fargo Advisors, LLC) until his August 22, 2017 termination. The AWC does not indicate whether Frieda had or did not have any so-called relevant disciplinary history, as is often disclosed in an AWC. In pertinent part, the AWC alleges that:
Between November 2012 and October 2015, Frieda and another Wells Fargo representative recommended an investment strategy to more than 50 customers, which was a majority of their customers, causing the customers accounts to become significantly over-concentrated in a single sector of the overall market. The over-concentration primarily involved four speculative equity securities within the energy sector. Due to the speculative nature of the recommended securities, the volatility of the energy market, and the high level of concentration, this strategy exposed customers to significant potential losses. In general, based on those recommendations, most of these customers were concentrated in energy-sector investments, with the majority of those investments concentrated in the four speculative energy securities.During the relevant period, in many instances, Frieda failed to properly consider and failed to obtain accurate customer investment profile information to determine the suitability of his over-concentration strategy and the securities he recommended as part of that strategy. In this regard, Frieda recommended the strategy to customers without proper consideration of each customer's individual investment experience, risk tolerance, investment time horizon, net worth, liquidity needs, and income. Consequently, Frieda did not properly assess the significant potential risks associated with his recommended strategy for each of these customers. In certain instances, the potential risks were compounded because the over-concentration in speculative energy-sector securities exceeded 50% of the customer's net worth (exclusive of personal residence).In 2015, when the energy market began a downturn, Frieda unsuitably recommended that certain of his over-concentrated customers adhere to his strategy without regard to their particular situations or ability to continue to sustain losses. By following Frieda's recommendation, the customers suffered millions of dollars in aggregate losses.
Gee, where have we seen that language before?
In accordance with the terms of the AWC, FINRA found Frieda to have violated FINRA Rules 2111 and 2010, and the self-regulator imposed a Bar upon Frieda from associating with any FINRA member firm in any capacity. The AWC asserts that Frieda was represented by Brian Rubin, Esq. of Eversheds Sutherland.
Online FINRA BrokerCheck records for Frieda as of August 31, 2020, disclose 58 items under the heading "Customer Dispute - Settled." BrokerCheck discloses one item under "Customer Dispute - Closed-No Action/Withdrawn/Dismissed/Denied."
August 27, 2020 Wells Fargo AWC
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Wells Fargo Advisors, LLC submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Wells Fargo Advisors, LLC (n/k/a Wells Fargo Clearing Services, LLC), Respondent (FINRA AWC 2015045713304 / August 27, 2020) (the "August 27, 2020 Wells Fargo AWC")
https://www.finra.org/sites/default/files/fda_documents/2015045713304
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I want to be very meticulous here in representing just how the August 27, 2020 Wells Fargo AWC characterizes the Respondent's "Background" and "Relevant Disciplinary History," so I am going to offer this verbatim extract:
BACKGROUND
Wells Fargo Advisors, LLC was a FINRA member from 1987 until November 2016, when it merged with another broker-dealer and became Wells Fargo Clearing Services, LLC, a FINRA member. Headquartered in St. Louis, Missouri, the firm engages in a general securities business. As of June 2020, the firm has approximately 25,807 registered individuals and 6,216 branch offices.
RELEVANT DISCIPLINARY HISTORYRespondent does not have any relevant disciplinary history with the Securities and Exchange Commission, any state securities regulators, FINRA, or any other self-regulatory organization.
At its core, the August 27, 2020 Wells Fargo AWC cites Respondent Wells Fargo for failing to reasonably supervise representatives Charles Frieda and Charles Lynch. In pertinent part the August 27, 2020 Wells Fargo AWCasserts that:
Between November 2012 and October 2015, Frieda and Lynch recommended that many of their customers invest a substantial portion of their assets at Wells Fargo in the four high-risk energy securities, including one low-priced security. For example, the representatives' recommendations resulted in a 38-year-old customer holding 92.4% of her total household account value in these four securities and a 54-year-old customer holding 55.7% of her total household account value in these securities. The two representatives sold approximately $46 million of these securities to their customers, representing about half of their overall sales.Frieda and Lynch exacerbated risk of investing in these securities by recommending that customers purchase shares of other energy securities. In many instances, their customers' investments in energy-sector securities exceeded 50% of their liquid net worth.Because of Frieda and Lynch's recommendations, 70 of their customers lost a total of more than $10 million when prices of energy securities prices plummeted in 2014 and 2015.
The August 27, 2020 Wells Fargo AWC chastises Wells Fargo for failing to sight the red flags of over-concentration in Frieda and Lynch's customers' accounts. As the August 27, 2020 Wells Fargo AWC asserts in part:
[B]etween September 2013 and April 2014, the firm's trade-review system issued 28 alerts that four customers of the representatives were concentrated in the same low-priced, energy security. The alerts noted concentration levels ranging between 35.18% and 86.95% for these accounts, which was above the firm's threshold for triggering a security concentration alert.
Notwithstanding that Wells Fargo's Written Supervisory Procedures ("WSPs") purportedly was filled with all sorts of policies, procedures, and protocols about the very alerts at issue, the firm essentially did nothing in response. As alleged in damning fashion in the August 27, 2020 Wells Fargo AWC:
[S]pecifically, the WSPs required reviewers to: (1) look for any trends of concentration issues in other accounts serviced by the account's representative; (2) review the representative's suitability determination, which the WSPs say the representative "should document"; and (3) consider client contact. But the firm did not review the representatives' other customer accounts for concentration trends, and in certain instances, did not consider contacting customers despite the number of alerts or concerns about whether the customers were aware of the risks associated with concentration. Rather, it resolved alerts based on the representatives' uncorroborated assurances that their customers were aware of the concentrations in their accounts.
Adding insult to injury, the August 27, 2020 Wells Fargo AWC piles on the numerous examples of Wells Fargo's compliance lapses:
In addition, the firm was aware that Frieda and Lynch had not documented the concentration-suitability determination for certain customers, as the firm's WSPs required, raising a concern regarding the underlying suitability of their recommendations.The firm knew, but did not investigate, that Frieda and Lynch were moving energy securities from customers' advisory accounts into brokerage accounts to avoid the firm's concentration limits in advisory accounts. This attempt to circumvent the firm's own limits was a red flag that the representatives might be unsuitably overconcentrating customer accounts in energy securities.The firm's WSPs required a daily blotter review to detect "unusual trading activity or patterns" and "[c]oncentration." The trade blotters for Frieda and Lynch consistently evidenced that they were effecting a high volume of sales of the four high-risk energy securities in certain of their customers' accounts. Yet the firm failed to follow-up on this red flag concerning the representatives' trading.
In response to the above-cited carnage, the August 27, 2020 Wells Fargo AWC alleges that Wells Fargo compensated 67 of Frieda and Lynch's customers to the tune of about $97 million. As to three non-compensated customers, the AWC alleges that "the firm will provide restitution to them pursuant to this AWC." As noted in "Attachment A" to the 2020 Wells Fargo AWC, the three customers will be compensated in the amounts of $84,964, $94,725, and $21,809.
FINRA Sanctions
In accordance with the terms of the August 27, 2020 Wells Fargo AWC, FINRA found that Wells Fargo violated NASD Rule 3010(a) and FINRA Rules 3110(a) and 2010, and the self-regulator imposed upon the member firm a Censure, $350,000 fine, and $201,498 in restitution as set forth on Attachment A.
Bill Singer's Comment
A Irrelevant Regulatory Charade
The August 27, 2020 Wells Fargo AWC would have us believe -- asks us to believe -- that Respondent Wells Fargo: "does not have any relevant disciplinary history with the Securities and Exchange Commission, any state securities regulators, FINRA, or any other self-regulatory organization." I'm sorry but that assertion is ridiculous and absurd, and, frankly, FINRA should be ashamed of itself for perpetrating such nonsense. According to online FINRA BrokerCheck records as of August 31, 2020, member firm "Wells Fargo Clearing Services, LLC has the following disclosures:
Regulatory Event: 163Civil Event: 2Arbitration: 295
I don't have the inclination or desire to walk all the way through Wells Fargo's regulatory memory lane, so, let me just cite a few relatively recent press release from the SEC and FINRA;
https://www.finra.org/media-center/news-releases/2011/finra-fines-wells-fargo-2-million-unsuitable-sales-reverse-convertibleshttps://www.finra.org/media-center/news-releases/2014/finra-fines-wells-fargo-advisorswells-fargo-advisors-financial-networkFINRA Orders Wells Fargo Broker-Dealers to Pay $3.4 Million in Restitution and Reminds Firms of Sales Practice Obligations for Volatility-Linked Products (FINRA Press Release / October 16, 2017)https://www.finra.org/media-center/news-releases/2017/finra-orders-wells-fargo-broker-dealers-pay-34-million-restitution-andWells Fargo Advisors Settles SEC Charges for Improper Sales of Complex Financial Products / Misconduct Imposed Substantial Costs on Retail Customers (SEC Release / June 25, 2018)https://www.sec.gov/news/press-release/2018-112SEC Charges Wells Fargo In Connection With Investment Recommendation Practices (SEC Release / February 27, 2020)https://www.sec.gov/news/press-release/2020-43#:~:text=The%20SEC%20ordered%20Wells%20Fargo,be%20distributed%20to%20harmed%20investors.
All of the above history is bad enough. You might want to take FINRA's side and argue that the August 27, 2020 AWC was aberrational. That FINRA wasn't trying to help spin things in a more favorable manner for Wells Fargo. You could argue that FINRA was simply erring on the side of fairness and consistency by not bringing up all of the history that I so callously dredged up. Okay, you could go with all of that but then you're going to have to explain this to me:
FINRA Sanctions Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC More Than $2 Million for Supervisory Violations Related to Variable Annuity Switches / Firms to Pay $1.4 Million in Restitution to Approximately 100 Affected Customers (FINRA Press Release / September 2, 2020) (the "September 2, 2020 FINRA Wells Fargo AWC"_https://www.finra.org/media-center/newsreleases/2020/finra-sanctions-wells-fargo-clearing-services-llc-and-wells-fargo
About a week after FINRA published the August 27, 2020 FINRA Wells Fargo AWC, the self-regulatory-organization posted the September 2, 2020 FINRA Wells Fargo AWC. As so proudly trumpeted in part by FINRA in its Press Release:
[FINRA] found that from January 2011 through August 2016 Wells Fargo failed to supervise the suitability of recommendations that customers sell a variable annuity and use the proceeds to purchase one or more investment company products, such as mutual funds or unit investment trusts. In spite of directives in the firms' supervisory procedures that supervisors review the suitability of any product switch by considering the comparative costs and benefits associated with the new and existing products, the firms did not obtain from variable annuity issuers data sufficient to review the suitability of variable annuity surrenders and subsequent switches, including surrender fees. Wells Fargo's procedures also required the firms to send switch letters to clients, which would have confirmed customers' understanding of the transaction, as well as related risks and expenses. Although the procedures required that such letters be sent "automatically ... based on alerts generated by [the firms'] supervisory system[s], unless withheld by the qualified supervisor," the firms did not, in fact, have a switch alert to identify switches from variable annuities to investment company products during the relevant period and the firms did not send switch letters to affected customers.As a result, between January 2011 and August 2016, Wells Fargo's representatives recommended at least 101 potentially unsuitable switches that required customers to incur both surrender fees and substantial new sales charges. For example, one former representative recommended that a customer liquidate a variable annuity with a surrender value of $126,681-which caused the customer to pay a surrender fee of $5,070-and then use the proceeds to purchase class A mutual funds with upfront sales charges totaling $5,531. In addition to causing the customer to incur $10,601 in surrender fees and upfront sales charges, the recommended switch resulted in the customer earning less annual income than she would have earned had she not sold the variable annuity.Jessica Hopper, Executive Vice President and Head of FINRA's Department of Enforcement, said, "Firms must have a reasonable supervisory system in place to detect potentially unsuitable switches. Wells Fargo failed to meet this standard. We are pleased that customers will receive restitution for surrender fees and sales charges incurred as a result of these recommendations." . . .
So . . . let's go take a gander of yet another "Relevant Disciplinary History" about Wells Fargo Advisors as published by FINRA:
On August 28, 2009, Wachovia Securities, LLC-which Wells Fargo Advisors, LLC had acquired in December 2008-executed an AWC through which it consented to findings that it violated NASD Rules 2110 and 3010 due to "supervisory failures regarding variable annuity sales" and having "had an inadequate system in place that would detect undisclosed switches."1 The AWC required the firm to pay a fine of $350,000.
Ummm . . . WTF? Seriously?? That's it??? That's the entire "relevant" prior disciplinary history for Wells Fargo Advisors? Where is the "relevant" prior history as noted in the August 27, 2020 FINRA Wells Fargo AWC? And let's not even pretend that the September 2, 2020 FINRA Wells Fargo AWC has nothing to do with the member firm's failure to reasonably supervise. As clearly set forth under the "Overview":
From January 2011 through August 2016 (the "Relevant Period"), Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC (together "Wells Fargo" or the "Firm") failed to establish and maintain a supervisory system, and failed to enforce written supervisory procedures ("WSPs"), that were reasonably designed to achieve compliance with FINRA's suitability rule as it pertains to switches from variable annuities to investment company products. Based on the foregoing, Wells Fargo violated NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct on or after December 1, 2014), and FINRA Rule 2010.
Just as a random exercise, consider the most-recent AWC posted by FINRA as of September 9, 2020. Note the stark difference between FINRA's presentation of registered representative Datys's "Relevant Disciplinary History" and contrast that with the absolute lack of any disclosure of "Relevant Disciplinary History" for Wells Fargo. See the article below from today's "Securities Industry Commentator" at http://www.rrbdlaw.com/blog.php#datys:
In the Matter of Harry Seth Datys, Respondent (FINRA AWC 2017054381601 / September 8, 2020)https://www.finra.org/sites/default/files/fda_documents/2017054381601%20Harry%20Seth%20Datys%20CRD%201877750%20AWC%20va.pdfFor the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Harry Seth Datys submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC alleges that Harry Seth Datys was first registered in 1990 and by 2005, he was registered with FINRA member firm WestPark Capital, Inc.In accordance with the terms of the AWC, FINRA found that Datys had violated NASD Rule 2310, and FINRA Rules 2111 and 2010; and the self regulator imposed upon Datys a $20,000 fine and a 15-month suspension with any FINRA member in any capacity. The AWC alleges that Sylvester Knox has the following "Relevant Disciplinary History":In 2008, the New Jersey Bureau of Securities (NJ Bureau) issued a Summary Revocation Order and Assessment of Monetary Penalties revoking Datys' agent registration and assessing civil monetary penalties against Datys in the amount of $6,000 for failing to comply with a heightened supervisory agreement with the firm. In 2006, the NJ Bureau had conditioned Datys' registration upon his entering into this agreement with the firm. The NJ Bureau found that Datys failed to comply with the agreement by failing to disclose four items to the NJ Bureau: (1) an action impacting Datys' registration in Colorado; (2) a New Jersey customer complaint; (3) a Texas civil litigation suit; and (4) a supervisory change.In 2014, the NJ Bureau assessed a civil monetary penalty for Datys in the amount of $15,000, as set forth in a Consent Order, after finding that Datys continued to actively transact business for up to four New Jersey residents between May 2008 and August 2012 and caused certain clients to change their principal address from their New Jersey residential addresses to their New York business addresses, despite the fact that the clients were still residing at the New Jersey addresses, after his registration in New Jersey had been revoked.Under the heading "Overview," the AWC alleges that:From 2012 to 2016, in connection with two securities offerings, Datys offered and sold 24 promissory notes issued by WestPark Capital Inc.'s parent company, WestPark Capital Financial Services LLC, to 14 customers, raising a total of $2,713,200. Datys violated NASD Rule 2310 and FINRA Rules 2111 and 2010 by failing to have a reasonable basis to recommend these notes to customers. In addition, Datys made negligent misrepresentations and omissions in connection with the sale of the offerings, in violation of FINRA Rule 2010 and in contravention of Section 17(a)(2) and (3) of the Securities Act of 1933.
For a number of years, I have chided, cajoled, and chastised FINRA for its woefully inconsistent approach to the issue of disclosing disciplinary histories. Beyond the simple act of disclosure, FINRA has exacerbated the issue by resorting to such inconsistent characterizations as mere "prior disciplinary history," versus "relevant disciplinary history," versus "relevant formal disciplinary history" versus the inclusion or exclusion of specific prior disciplinary history at the SEC or with a state regulator or with any other regulator. For example, see:
FINRA's Foolish Inconsistency (BrokeAndBroker.com Blog / June 9, 2017)http://www.brokeandbroker.com/3495/finra-history-consistency/
Nor is the "relevancy" issue one of recent vintage:
FINRA Says Impeccable Merrill Lynch Has No Relevant Disciplinary History (BrokeAndBroker.com Blog / May 19, 2020)
http://www.brokeandbroker.com/5220/finra-relevant-disciplinary-history/In the Matter of TD Ameritrade, Inc., Respondent (Securities Industry Commentator / January 7, 2020)http://www.rrbdlaw.com/4997/securities-industry-commentator/#finraAll Voya FINRA AWCs Are Not Relevant Except When They Are (BrokeAndBroker.com Blog / April 24, 2019)http://www.brokeandbroker.com/4553/finra-awc-voya/FINRA Disciplinary Settlement Raises Relevancy Of Any (BrokeAndBroker.com Blog / July 10, 2017)http://www.brokeandbroker.com/3522/finra-awc-statutory-disqualification/
FINRA MIA
Let's note the appalling state of Wall Street self regulation. In 2012 through 2015, Wells Fargo reps Lynch and Frieda alleged recommended unsuitable investment strategies on dozens of customers. Five to two years after said carnage, in December 2017, FINRA enters into settlements with both Lynch and Frieda. FINRA was so troubled and disturbed by the reps' misconduct that the self regulator imposed Bars on both of the respondents.
And then 2018 comes and goes.
And then 2019 comes and goes.
And now, here we are, nearly 9 months into 2020, and only now, FINRA enters into a settlement with Wells Fargo for that member firm's failure to supervise Frieda and Lynch's recommendations, which resulted in 70 of their customers losing over $10 million when prices of energy securities prices plummeted in 2014 and 2015. Let the enormity of that sink in.
70 customers70 customers lost over $10 million70 customer lost over $10 million in 2014 or, at the latest, 2015.
The 2020 Wells Fargo AWC chastises Wells Fargo for failing to sight the red flags of over-concentration in Frieda and Lynch's customers' accounts. But when were those flags waving? The 2020 Wells Fargo AWC says in 2013 and 2014. Again, this is 2020 -- as in six and seven years later. The 2020 Wells Fargo AWC says Wells Fargo didn't actually follow the policies and procedures set forth in its WSPs. Again, those WSPs and Wells Fargo's failure to comply with its own policies and procedures was extant in 2014 and 2015 -- so just what the hell was FINRA doing as part of its own oversight of this major member firm during those years and all that ensued?
Unless FINRA wants to pretend that Wells Fargo magically created its WSPs in 2020, what's the value of self regulation if FINRA's staff had been engaged in annual or routine oversight of this massive financial services firm yet never noted the disconnect between the voluminous policies and procedures set forth in the WSP and the firm's less than meticulous efforts to comply with its own in-house requirements? Again, we're talking about six to seven years of apparent failed detection by Wall Street's self regulator.
Ultimately, the worst indictment of FINRA's failed regulatory agenda is found in a very simple comparison. In 2017, FINRA barred Wells Fargo reps Lynch and Frieda. What delayed FINRA's settlement with Wells Fargo until August 2020? Both Lynch and Frieda settled in 2017 -- three years ago! We have a voluminous record of customer complaints against the reps and Wells Fargo. Just what required three years of FINRA's time, energy, and effort to file charges against Wells Fargo or, in the alternative, settle with the member firm?
As I have recently stated, FINRA is hobbled by a lackluster Board of Governors, which fails to oversee its own organization and protect the public and the industry. The unwieldy 24 Governors should be slashed in half to 12, which would prompt financial savings to the organization and allow for a more focused Board better dedicated to the task of overseeing those engaged in regulating Wall Street. A starting point for the Board's oversight would be to require more uniform criteria for determining what constitutes "relevant" disciplinary histories in FINRA settlements and decisions.