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Friday, November 20, 2009
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Finra wants to know: How well do you know your cleaning crew?Examiners worry about brokers posing as janitors to get inside info like Charlie Sheen’s character in “Wall Street”
Over the past couple of months a number of broker-dealers have been asked a new question by the Financial Industry Regulatory Authority: How do you vet your cleaning crews?
“This was the third question asked of three of our broker-dealer clients during their last exams,” said Rick Nummi, executive consultant at Accounting and Compliance International, and a former attorney in the Securities and Exchange Commission’s office of compliance and examinations. “The reason I think they are asking that question is that Charlie Sheen dressed up as a cleaning person to get insider information in the movie “Wall Street.’” In the wake of the Bernard Madoff investment scam, both Finra and the SEC have become much more aggressive in their audits — highlighted recently by the 14 arrests in the widening insider trading ring that allegedly ran through the hedge fund manager Galleon Group. Finra has not told examiners to ask specifically about cleaning crews, said Herb Perrone, a spokesman. “It’s not uncommon for examiners to ask individuals who would have access to their files,” he said. “It’s entirely possible that some examiners have found something they don’t like about the way outside services were being vetted.”
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