Scott Barnard Quoted in Compliance Week Article on Future of FINRA
Compliance Week has quoted Akin Gump litigation partner Scott Barnard in the article “Market shifts, SEC priorities spark debate of FINRA’s future,” which, as the article reports, faces a change in leadership later this year when its chairman retires. Sen. Tom Cotton, an Arkansas Republican, is quoted in the article as questioning the future of FINRA, the Financial Industry Regulatory Authority, and whether it should be folded into the Securities and Exchange Commission.
Barnard says he sees the problem as one in which the SEC and FINRA all too frequently duplicate efforts. FINRA’s enforcement, he said, is not as efficient as the SEC’s, which he attributes, to some extent, to the fact that it does not have the same resources the SEC has. “They try to do what they can,” he added, “but there is overlap and a duplication of effort that could be handled better. Each is trying to one up the other a little bit, and you are dealing with two masters.”
Folding FINRA into the SEC may not be a worthy alternative, Barnard added, because it would “only create more turf battles and confusion about roles.” He continued, “It might make more sense to better define what FINRA’s role is. With any government agency, it is always going to grab more power if it can. FINRA has grown beyond what it was supposed to be and, maybe rather than doing an overhaul or pulling it into the SEC, the best thing would be to draw the lines around it more clearly so everyone knows what the roles are.”