Here’s a bit of Wall Street arcana:
The Financial Industry Regulatory Authority’s (“FINRA”) website provides this information at :
Who must register as a representative?
Anyone actively involved in the member's investment banking or securities business must be registered as a representative with FINRA. Their duties may include supervision, solicitation, or training of persons associated with the member.
[NASD Membership and Registration Rule 1031(b) - Definition of Representative]
Who must register as a principal?
Persons associated with a member, enumerated below, who are actively engaged in the management of the member's investment banking or securities business, including supervision, solicitation, conduct of business, or the training of persons associated with a member for any of these functions are designated as principals. Such persons shall include:
- Sole Proprietors
- Managers of Offices of Supervisory Jurisdiction, and
- Directors of Corporations.
[NASD Membership and Registration Rule 1021(b) - Definition of Principal]
Let me reiterate the key points: Anyone actively involved in the member's investment banking or securities business must be registered.
I just went onto FINRA’s much-vaunted BrokerCheck to find out the registration status of Jon S. Corzine, who is described in the press as the Chairman and CEO of FINRA member firm MF Global Inc. -- and such duties would clearly fall under the need to be registered.
Now I know the good folks at FINRA know of Corzine – after all, in 1997 he was elected to the predecessor self-regulatory organization NASD’s Board of Governors. I also note that as of November 3, 2011, FINRA’s “List of Members” indicates the membership of:
MF GLOBAL INC. 717 FIFTH AVENUE, 9TH FLOOR, NEW YORK, NY 10022
Okay, so, here's what's troubling me. As best I can tell from FINRA’s online records, Corzine is indicated has having last passed these examinations:
- Series 24 Principal’s (June 1982);
- Series 7 Representative’s (June 1975); and
- Series 32 Futures (August 2010).
FINRA’s online records disclose that Corzine was last registered in 1999 with Goldman, Sachs & Co. Thereafter, he held elected offices until he joined MF Global Inc. in March 2010. Accordingly, FINRA’s BrokerCheck records for Corzine clearly state that he is “Currently employed by and registered with. . .” FINRA member firm MF Global, Inc.
As part of FINRA's helpful Qualifications FAQ - Registration page, the self-regulatory organization offers this interesting admonition:
How long will my qualification examinations be valid after I end my affiliation with a FINRA member firm?
You may reactivate your representative or principal exam up to two years after your registration has been terminated. (Note, the two years are calculated from the employment end date with the prior employer or from the CE inactive date.)
[NASD Membership and Registration Rules 1021(c) and 1031(c) - Requirements for Examination on Lapse of Registration]
Given that Corzine was out of the industry for about 12 years – which is quite a bit beyond the 2 year window – he needed to requalify by examination but there's no indication that he sat for the Series 7 or the Series 24, which he needed upon his return to a FINRA member firm.
This really puzzles me. I mean, you know, FINRA makes such a BIG deal about not granting registration waivers, particularly when someone has been out of the business for a few weeks or months beyond the two year window. Since I don't see any indication that Corzine took the two exams at issue, did FINRA grant him a double waiver? Who authorized that? Why? And before you're too quick to justify granting such a waiver, please consider these two cases involving two shlubs with no apparent pull. You tell me if my thesis about one FINRA for the small fry and one FINRA for the big fish isn't true.
Driving a Point Home: Stockbroker Registration (BrokeAndBroker Blog, February 3, 2009)
Case Analysis: Gina Guzzone (RRBDlaw.com, 2004)