Thursday, September 22, 2011

CEO Tells Congress He Was Fined For Hiring Too Many People

Only in the securities industry could this nonsense occur. The CEO of Euro Pacitic Capital, a broker-dealer, testified before Congress about job creation, and testified that

securities regulations have prohibited me from hiring brokers for more than three years. I was even fined fifteen thousand dollar expressly for hiring too many brokers in 2008. In the process I incurred more than $500,000 in legal bills to mitigate a more severe regulatory outcome as a result of hiring too many workers. I have also been prohibited from opening up additional offices. I had a major expansion plan that would have resulted in my creating hundreds of additional jobs.

Typical FINRA. Rather than assist compliant firms from growing their business, it continually finds ways to stop the expansion, and in this case, to prevent the creation of new jobs. More than anyone else, I understand the regulations that Schiff is referring to, and understand the reasons for those regulations. The reasons are valid. The rigid enforcement of the regs, rather than working with the firm to permit the expansion, is the problem.

Schiff's full remarks are at

At the same time, you have to be amused at the spin some bloggers are putting on this story. Like this headline link to the exact same story: "CEO Testifies Obama Fines Their Firm for Creating Jobs." Of course, the regulations that Schiff is referring to have been in place for decades, Obama has nothing to do with the enforcement of those regulations, and neither does the federal government.  FINRA is a private organization, which regulates the financial industry with SEC oversight, but not day to day involvement. But don't let the facts get in the way of a good presidential bashing.

CEO Tells Congress He Was Fined For Hiring Too Many People 

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