Don’t Be a Bad Boy (or Girl)

By Peggy E. Chait

In my younger days, like many women, I was somewhat attracted to the “bad boy.” He was somewhat aloof, ran a bit wild and didn’t conform to the rules. Yet, he was what I wanted. Perhaps when he grew up, he would turn into a law-abiding, conservative Wall Street gentleman, and by then I knew better.

I also remember as the Chief Compliance Officer and Chief Financial Officer of a NYSE Member Firm, back in the mid 1980’s, reviewing U4 forms and disciplinary histories. I have to confess that I was sometimes amused by what I saw disclosed. People that you would least suspect were anything other than upstanding citizens their entire lives, had their past dal...

We love regulation!

We love regulation! We owe our success to the regulatory environment in the financial services industry. From a selfish standpoint, we can say that we enjoy regulations. Similar to the way doctors love the flu and dentists love cavities, we are happy that we have a raison d'être.

Now that I have been associated directly or indirectly with the financial services industry for over five decades, I have come to the realization that while I value regulation, I really hate some of the regulations. I don’t hate all regulation since I recognize that at least some regulation is necessary. On the other hand, I recognize that the current regulatory environment in the securities industry is s...

With a handshake

By Peggy E. Chait

40 years ago, when I started working in this illustrious industry, we call Wall Street, much of what was agreed upon was done with a handshake. A person’s word was his or her word, and “just and equitable principles of trade” as espoused in FINRA Rule 2010, were understood and confirmed through the extension of a hand. Trust existed between client and professional and the number of rules that existed to “guide” the behavior of the professional was limited. Trust existed between professionals as well. For some reason, written agreements between Broker-Dealers were concise, and made their point without pages and pages of representations and warran...

Is Congress more relevant than ratings?

In 2013, the SEC adopted amendments to the net capital rule that eliminated references to credit ratings that had previously applied to non-exotic debt securities such as high grade corporate debt and commercial paper that have a ready market.

Broker-dealers were supposed to either use a 15% haircut for their portfolios of these items or to have procedures in place to determine whether they have minimal credit risk. We can’t blame the SEC for changing the rules as they had little choice but to comply with the law. The changes were dictated by the politicians in Congress that passed the Dodd-Frank Act. That Act was a reaction or an over-reaction to abuses in the credit ratings industry. ...


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