ORLANDO – The
Financial Industry Regulatory Authority (FINRA) plays an important in helping
keeping the public’s investments safe, and law professor Benjamin Edwards wants
to make sure the organization is keeping up its end of the bargain.
FINRA is an
independent, nonprofit organization that is responsible for protecting the
United States’ investors by ensuring the securities industry operates fairly
and honestly. Edwards, who teaches law at the Barry University Dwayne O.
Andreas School of Law in Orlando recently published a draft law review
article called “The Dark Side of Self-Regulation” and will be published in the University of
Cincinnati Law Review.
examines FINRA’s public representatives serving on the organization’s board
of governors and proposes an alternate appointment process for said
representatives. One of the main reason Edwards proposes taking another look at
some of the public representatives is because some of them also serve on the
boards of corporate financial intermediaries, which could lead to conflicts of
States faces a looming retirement crisis,” Edwards told the Florida Record when asked about his
inspiration for writing the article. “FINRA plays a vital role in setting the
degree of protection for savers. I want it to be as effective as possible. That
draft also builds on prior work I’ve done.”
proposals aren’t meant to overhaul FINRA. Instead, his proposed reforms are
incremental and do not alter the current structure of FINRA’s Board of
Governors. Instead, along with a different appointment process, Edwards is
proposing increased transparency and more careful oversight from the Securities
& Exchange Commission (SEC). In fact, the concern regarding the appointment
process for public representatives isn’t a new one. It was initially raised by
Massachusetts at FINRA’s creation, according to Edwards.
draft, I also stressed that the proposed incremental reforms should not be
viewed as silver bullets,” Edwards said. “My position is that FINRA would be a
better and more effective organization with the reforms than without.”
to Edwards' paper has been generally positive he says. Edwards presented the
draft at South Eastern Association of Law Schools and received insightful and
generally positive comments. It’s also been circulated to law professors around
the country and Edwards was able to improve upon it based on the feedback he
received. The Oxford Business Law Blog also contacted Edwards with a request
for a post on the piece.
As far as
what Edwards’ goal is for all of this, it’s simple—to see a more effective and
“I think if
even one of the proposals is adopted by Congress, the SEC or FINRA, it may
generate improvements greater than the trade-offs involved,” Edwards said.
Edwards’ article takes a critical look of FINRA, he also recognizes that there
are a lot of good people who work there, too.
“I have a
tremendous amount of respect for the job they do,” Edwards says. “FINRA’s board
and officials also face a tough task and endure pointed criticisms from all
sides. While my draft focuses on the dark side of self-regulation, I hope that
highlighting dangers we can avoid them. Ultimately, society benefits when FINRA
strikes the right balance between the public interest and industry concerns."