Tuesday, February 09, 2010

Is the FSA doomed?

Is the U.K.'s Financial Services Authority, the uber principles-based regulator held up (pre crisis) by the industry as the model for other nations follow ... now doomed?

The useless U-5

Peter Chepucavage, a former SEC staffer who speaks up on issues re investors and brokers, tells me the form U-5 termination report has outlived its usefulness.

He links to attorney Bill Singer's analysis of a recent arbitration I reported on, in which a broker won $4 million.

"We encourage the reading of this excellent analysis of the U-5 which in our view is a relic of the past," Peter says, adding:

We have always believed the following;
1. It should never be used for performance related issues.
2. It should never be public until a regulator has made a finding of violation.
3. It should never reduce complicated employment issues to a word or phrase.
4. The employer should provide the facts to the regulator without making any judgments and the employee should respond to those facts. The regulator should make the judgment.