Wall Street Journal
It's about to get harder for brokers to hide their dirty laundry from clients, according to the paper. The Financial Industry Regulatory Authority will begin sharing with state insurance regulators a monthly list of securities brokers who have been banned or suspended from the industry. The move stems from concerns that regulatory gaps have allowed some brokers to continue peddling financial products to clients even after they have been nailed for misconduct. A number of states are also planning to improve communication and coordination between their insurance and securities departments, the paper reports. Meanwhile, a separate article published Friday identifies another broker-related loophole in need of closing. A public FINRA website that allows investors to check the backgrounds of brokers fails to include all available information, the paper reports. "The Journal found at least 38,400 brokers have regulatory or financial red flags that appear only on state records, which in most states aren't available without contacting state regulators. Of those, at least 19,000 had completely clean BrokerCheck records." FINRA is reportedly taking steps to make the database more comprehensive and to allow clients to see which brokers leave their employers while under investigation for bad behavior.
'Tis the season for targeting regulatory loopholes, looks like. "The Securities and Exchange Commission, seeking to level the playing field for all investors, plans to fix a flaw in how it electronically distributes corporate regulatory filings that has allowed rapid-fire traders to get a first look at potentially market-moving news," the paper reported at the end of last week. Previously, traders who subscribed to a direct feed of SEC filings were able to view new information before the documents appeared on the SEC's website, giving them a potential advantage over mom-and-pop investors. The agency plans by the end of the first quarter to ensure that documents are available on the website before they make the feed.
Yahoo is trying to get hip to the times with products designed for wearable technology, according to the paper. The FT also notes Yahoo is putting its faith in mobile devices more broadly. The latter observation is somewhat puzzling, since that strategy is shared with approximately every major company on the planet, but it seems to be a reference to Yahoo's slow-moving shift away from focusing on its desktop website.
New York Times
The financial services industry doesn't take up much space in the Times today, but the paper made up for it with two stories published late last week. The first draws parallels between the surge in title lending and the boom in home equity loans during the run-up to the subprime housing crisis. Loans that use customers' cars as collateral are becoming increasingly popular as states go after payday lenders, according to the report. But like payday loans, title loans typically come with very high interest rates and fees; "effective interest rates ranged from nearly 80% to over 500%" in the Times' review of more than three dozen agreements.
The second article details the many troubles of Puerto Rican bank Doral Financial, which includes a massive mortgage scandal, a battle with the government over a $230 million tax refund, regulatory run-ins and most dramatically the unsolved murder of executive Maurice Spagnoletti three years ago. A Federal Bureau of Investigation raid on the bank's main office Tuesday, which may or may not be related to the Spagnoletti investigation, occasioned the look back at Doral's history.