When political and financial corruption meet, the result is the Financial Services “Reform Act” that may be the worst piece of legislation Barack Obama has ever passed. For those who wonder how anything could be worse than his healthcare law or any other garbage he is trying to pass this week, the financial services law is far worse.
It takes the worst of the bad actors and gives them even more unchecked power.
I have said on many occasions that while regulators have ever increasing powers, nobody regulates the regulators. This administration has too many “Czars” who answer to nobody.
One of the most corrupt regulatory agencies is the National Futures Association. I will not rehash their entire history of misdeeds, but NFA Poobah Dan Driscoll leans on a pair of prosecutors named Phil Raleigh and Ron Hirst. Using young and easily malleable field operatives like Melissa Glasbrenner, the NFA claims that it wants to safeguard the integrity of the futures and derivatives markets.
This is a lie. Their goal is to subvert that very integrity. The goal of the NFA is to put every small mom and pop commodities shop out of business so that JP Morgan, Morgan Stanley, and Goldman Sachs can get all of the business. Those firms sit on the NFA’s board, and as we all know, Goldman Sachs currently runs this country.
Trying to fight the NFA using the legal system is not possible because awhile back legislation was set up exempting the NFA from lawsuits.
Let me state this again so that everybody can understand this. The NFA cannot be sued.
This is why they spend their time pursuing commodity brokerage firms with trumped up charges. The firms then have the choice of surrendering or taking part in a kangaroo court where the “independent” panels are prosecution shills. I got to meet Panel Chairman Bill Maitland, a walking conflict of interest if there ever was one. With his help, hundreds of honest financial professionals I know have had their careers wrecked all so that Dan Driscoll can look like he is “doing something.”
Does anybody in their right mind think regulatory agencies should be exempt from lawsuits? The left howls when businesses try to get lawsuit exemptions. Even the President of the United States can be civilly sued.
Why should regulatory agencies get a special carve out? Why should they be above the law?
Barack Obama has made things much worse with the financial services bill.
It is one thing to exempt potential criminals from lawsuits. It is another thing entirely to keep the flow of information from even existing. Barack Obama promised that his administration would be the epitome of honesty and transparency.
Once again, that does not exist when it comes to the Obama regulatory machine. The financial services law exempts regulatory agencies such as the NFA from Freedom of Information Act requests.
Again, reread that carefully. The NFA is now completely exempt from FOI Act requests.
They can do everything behind closed doors. For those of you who despise big business for existing and breathing, you can stop celebrating. Again, this agency is big business. It is punishing the small businesses.
I support big and small businesses. There is absolutely a place for regulation in our society. Yet why should regulators be given special treatment that businesses are denied?
Liberals will most likely not care about the civil liberties angle because businesses are not very sympathetic victims.
Yet financial service businesses are required to have compliance departments that operate openly and ethically to ensure the rules are being followed. The notion that any firm could be exempt from lawsuits and immune from having to reveal its procedures and methodology from anybody is frightening.
The NFA does answer to the Commodity Futures Trading Commission, but the CFTC is a rubber stamp. The next level is Congress, and Congress does not like to rein in regulatory agencies. It is bad public relations.
My advice to anybody working for a commodity brokerage firm is to refuse to cooperate with regulators. Get the most expensive lawyers money can buy. Stonewall, drag everything out, and engage in scorched Earth tactics.
Also, do not settle a single client complaint. Any client that complains, fight. The purpose of settling complaints quietly is to keep regulators out of it. Regulators have the right to dig through your settled claims. They then strong-arm those same clients into assisting their case with promises of more money. It is illegal to have any settlement agreement that bans a client from testifying in a case. Therefore, no case is ever truly settled. Settling only delays the inevitable. The firm ends up paying twice.
Now the NFA will be able to do this under the radar. Firms will have no idea what rules they are breaking because the rules are not defined, and constantly changing.
Once clients realize that they can lose money, sue, and get their money back, the transactions become riskless. Firms then realize that it is easier to close up shop then do business in an environment rigged against them. This is what the NFA wants.
(The stockbrokerage industry is less corrupt because the regulatory agency, FINRA, has clearly defined rules that are easy to understand. There is much more transparency than with the commodity brokerage regulators.)
Another solution is for commodity brokerage firms to sell gold and silver bullion, which is beyond the clutches of NFA regulators…for now. They are trying to expand their tentacles.
This is bigger than Dan Driscoll and his cesspool of barely legal subordinates.
This is about an Obama culture of regulation that fails to understand that if every business is harassed out of business, there will be a weakened American existence. Companies will just move their operations overseas to business climates which are more friendly.
Either the USA is open for business or it is closed. There is no middle ground.
The financial services law of 2010 must be repealed. At the very least, the provision exempting financial regulatory agencies like the NFA from FOIA requests must be killed outright forever.
At some point, if we do not, there will be no businesses left to regulate.
Liberals may call this utopia, but this conservative sees it as the financial equivalent of the Killing Fields.
eric
“Let me state this again so that everybody can understand this. The NFA cannot be sued.
Any regulatory body, even self-regulatory bodies like the NFA, can theoretically be sued. What you should have clarifies is that the NFA as a mediator and arbitrator can not be sued for the fraud or other illegal behavior of the mediated bodies, or the results of the mediation or arbitration. You really should clarify things like this for the general reader.
Or like this:
“Again, reread that carefully. The NFA is now completely exempt from FOI Act requests.”
Yes. That’s because they’re not a government entity. I’m pretty ceratin you know that, though. And sure enough here you explain that, in your own inimitable way…
“The NFA does answer to the Commodity Futures Trading Commission, but the CFTC is a rubber stamp.”
Now, here you make a GREAT point. Here you have a self-regulatory body, representing the big shots of futures trading (as will always happen with self-regulation), using the law to run roughshod over small futures houses.
Sur-prise, Sur-prise!
“My advice to anybody working for a commodity brokerage firm is to refuse to cooperate with regulators.”
Nice. Why not just play by the rules? Why not fight the internecine battle in your former industry rather than just fighting direct governmental regulation that isn’t even related to your complaints? Why divert the fight from real regulation to classical-liberal self-regulation? That’s what’s failing here, right – Classical-liberal self-regulation? It seems like every time the government allows industry to police itself, the industry makes a mess of it. And then you guys complain that the government didn’t handle it right. Which is it? Do you want the government to prop you up, stay out of it, or get rid of self-regulation? Which is it?
JMJ