Audit Committee
Executive Committee
Finance, Operations & Technology Committee
Investment Committee
Management Compensation Committee
Nominating & Governance Committee
Regulatory Policy Committee
Regulatory Operations Oversight Committee

Management Compensation Committee

The Management Compensation Committee reviews and recommends changes to FINRA's compensation policies, programs and practices, with the primary objective that FINRA attract, develop and retain high performing individuals who are capable of achieving FINRA's mission of ensuring market integrity and investor protection. The Committee also reviews the plans for the development, retention and succession of key executives of the Corporation and its subsidiaries.

Nominating & Governance Committee (Nominating Committee)

The Nominating and Governance Committee is responsible for nominating persons for appointment or election to the FINRA Board, as well as nominating persons to fill vacancies in appointed or elected governor seats on the Board. The Committee also nominates Industry and Public members for positions on FINRA's National Adjudicatory Council.

The Committee is responsible for periodically reviewing and recommending changes to standing committee charters and, in consultation with the CEO, nominates the members and chairs of each standing committee of the Board. Also in consultation with the CEO, the Committee develops and recommends to the Board guidelines for effective corporate governance. In addition, the Committee reviews and approves appointments to each of FINRA's advisory committees and changes to the advisory committee enabling resolutions.

[F]INRA's Board of Governors is a non-representative entity nurtured by an indefensible system of gerrymandering whereby over 91% of the organization's member firms (those designated as "Small" and defined as having at least 1 but no more than 150 registered representatives) are restricted to only 3 of 24 seats (less than 13% of the organization's membership). Worse, FINRA's Nominating and Governance Committee, which nominates candidates for Governors, does not have one Small Firm Governor among its seven member committee https://www.finra.org/about/governance/standing-committees
 
With the exception of Small Firm Governor Stephen Kohn, who is now seeking re-election to a second term, I know of no current Governor who is aggressively supporting efforts to seat a Small Firm Governor on the Nominating Committee. 

Given FINRA's social engineering of its Board and key Committees, and given the ongoing demise of FINRA's overall membership, I refuse to afford this so-called self-regulatory-organization any legitimacy and continue to call for its decertification. Consequently, while I welcome the election of Eileen Murray as Chair, I urge her to rectify the outrageous lack of fair representation on FINRA's Board and Committees.

From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Balaci assisted Goettsche and Medlin in creating and operating the BitClub Network and served as a programmer for the BitClub Network.  

As a part of the scheme, Balaci and Goettsche discussed that the target audience for the BitClub Network would be "dumb" investors, referred to them as "sheep," and plotted that they would be "building this whole model on the backs of idiots."  The BitClub Network told investors that they could invest in three different bitcoin mining pools; however, Balaci admitted that, at no point during the conspiracy was he aware of the BitClub Network operating three separate bitcoin mining pools.  Balaci admitted that he, at Goettsche's behest, changed the figures displayed as bitcoin mining earnings to make it appear that the BitClub Network was earning more than what was actually being mined.  For example, in February 2015, Goettsche directed Balaci to "bump up the daily mining earnings starting today by 60%," to which Balaci warned "that is not sustainable, that is ponzi teritori [sic] and fast cash-out ponzi . . . but sure."  In connection with his plea, Balaci confirmed that during the course of the scheme, the BitClub Network took at least $722 million worth of bitcoin from investors.

[C]rawford admitted that from May 2017 to July 2019, he conspired with Robert Wayne Boling, Jr. (a U.S. citizen), and others to steal money belonging to U.S. Servicemembers and veterans.  By pleading guilty, Crawford admitted to recruiting at least 30 individuals (aka "money mules") who provided their bank account information to receive funds stolen from military affiliated individuals.  On average, each unauthorized transfer from a victim's accounts ranged from between $8,000 to $13,000.  Crawford kept a percentage of the withdrawn funds for himself and oversaw the transmission of the remaining amounts by means of international money remittance services to Boling and others in the Philippines.

. . .

In October, Crawford's co-defendant Frederick Brown, age 38 of Las Vegas, NV, pleaded guilty to federal charges in connection with this scheme.  Brown, a former civilian medical records administrator for the U.S. Army at the 65th Medical Brigade, Yongsan Garrison, South Korea, admitted that while logged into the Armed Forces Health Longitudinal Technology Application, he illegally captured on his cell phone personal identifying information (PII) of thousands of military members, including names, social security numbers, DOD ID numbers, dates of birth, and contact information.  Brown further admitted that he subsequently provided that stolen data to Boling so that Boling and others could exploit the information in various ways to access Department of Defense and Veterans Affairs benefits sites and steal millions of dollars. 

As asserted in the federal grand jury indictment, Boling, together with his Philippines-based co-defendants Allan Albert Kerr (Australian citizen) and Jongmin Seok (South Korean citizen), specifically used the stolen information to compromise a Department of Defense portal designed to enable military members to access benefits information online. Once through the portal, the defendants are alleged to have accessed benefits information.  Access to these detailed records enabled the defendants to steal or attempt to steal millions of dollars from military members' bank accounts. The defendants also stole veterans' benefits payments. Evidence of the defendants' scheme was detected earlier this year, advancing the investigation that led to the indictment.

The Departments of Defense and Veterans Affairs are coordinating with the Department of Justice to notify and provide resources to the thousands of identified victims.

The Texas State Securities Board issued two emergency cease and desist orders against firms and individuals claiming to provide lucrative investment opportunities in international cryptocurrency trading platforms that trade bitcoin and mine cryptocurrency. The subjects of the orders purport to operate out of the same residential address in Houston, Texas, and tout daily, potential profits ranging from 35% to better than 600% based upon the amount of money investors are willing to part with.

The respective orders entered against LoudMines and Swiftminex may be accessed at LoudMines order and Swiftminex order.

"In every urban geography, the web traffic of people and what they're searching for has changed, versus six to 12 months ago, to be much more suburban," he said Thursday on CNBC's "The Exchange." "Even in the urban geographies where that rotation has not happened in the actual housing purchase and sales yet, the consumer searching is going in that direction and we continued to see that through the whole Covid crisis in the last three months."

Member firm of registered securities association filed application for review of association's decision denying member firm's application to permit its continued membership while associating with an individual who was subject to a statutory disqualification. Held, application for review is dismissed.

[T]he NAC denied CCS's membership continuance application on May 24, 2018. 

The NAC found that Springsteen-Abbott was statutorily disqualified because of FINRA's August 2016 and July 2017 decisions imposing a bar and that "it is not in the public interest, and would create an unreasonable risk of harm to the market or investors, for Springsteen-Abbott to continue to associate with" CCS. First, the NAC found that Springsteen-Abbott improperly continued to associate with CCS following the August 2016 bar and that CCS's application sought "to avoid the real and immediate effects of the unqualified bar." Second, the NAC found that the conduct underlying Springsteen-Abbott's statutory disqualification was serious and the bar was recent and noted that Springsteen-Abbott and the other hearing witnesses "attempted to downplay the seriousness of her misconduct by recasting it as having resulted from mere accounting errors and other process deficiencies that have been corrected." Third, the NAC found that CCS could not stringently supervise Springsteen-Abbott in the manner it proposed. It observed that Abbott lacked the necessary independence to supervise his wife, that it is difficult for employees to supervise the owner of a firm, and that the proposed supervisory plan was inadequate as it "consist[ed] mainly of boilerplate language and other generic provisions and contain[ed] a number of provisions that are inapplicable to [CCS's] business."

In this case, the NAC denied CCS's application because the conduct underlying Springsteen-Abbott's bar was serious and FINRA imposed the bar recently, she engaged in intervening misconduct, and CCS's proposed supervisory plan was inadequate. The NAC based its conclusions on the totality of the circumstances, supported its conclusions with evidence and precedent, and adequately explained the bases for its conclusions. We agree that the considerations the NAC cited provided a reasonable basis for denying the application. Indeed, we have held that where a statutory disqualification results from a bar that the Commission imposed that did not include a right to reapply for association after a specified period of time, "[n]othing more than the nature and seriousness of the underlying conduct that led to the statutory disqualification and bar as assessed by the Commission is necessarily required" for FINRA to "deny the application" for consent to associate notwithstanding the disqualification. On this record, we would have considered the nature and seriousness of the misconduct underlying the bar that we recently sustained and the inadequacy of CCS's proposed supervisory plan to be sufficient grounds for denying the membership continuance application. As a result, it was reasonable for FINRA to consider the nature and seriousness of the underlying misconduct that led it to impose an unconditional bar along with Springsteen-Abbott's intervening misconduct and the deficiencies in the supervisory plan and conclude that permitting Springsteen-Abbott's continued association with CCS was not in the public interest. 

CCS argues that the NAC erred in discounting that public investors in the Funds would pay more if CCC had to rely on an unaffiliated broker-dealer to offer the Funds rather that its inhouse broker-dealer CCS. But the NAC acknowledged CCS's argument that investors would benefit from Springsteen-Abbott's continued association with the firm because then she could continue to fund it and determined that this did not compel approving the application. The NAC reasonably concluded that the risks posed by Springsteen-Abbott's continued association with the firm as a result of the seriousness of the underlying misconduct, recency of the bar, and inadequacy of CCS's proposed supervisory plan outweigh any potential increased expense to the Funds' investors, and we concur.