Business

FINRA ruling on broker’s sports betting is ‘moronic’: lawyer

The regulator is an ass.

That’s what a securities industry gadfly says of the recent enforcement of a Financial Industry Regulatory Authority (FINRA) rule against a broker who made sports handicapping picks.

Longtime securities lawyer Bill Singer complains that regulators missed Bernie Madoff’s gross thievery for years, but now hammer “a small fry” broker who made pennies from an office betting pool and nothing from a blog.

“This is hypocritical,” says Singer, a former National Association of Securities Dealers regulator and a critic of the industry’s self-regulatory system. He condemns the ruling this month by FINRA in penalizing broker Nicholas Kayal’s sports betting and outside sports podcasts.

FINRA officials defended the decision, which included a fine.

But Singer writes in his newsletter commentary the decision is “asinine, inane, moronic, stupid, pandering, insincere, sanctimonious, self-righteous; specious, spurious and glib.” He added, “I don’t know of a securities firm that doesn’t have a football pool or NCAA brackets contest.”

Still, Kayal’s activities, FINRA officials ruled, violated an outside business activities ban on brokers.

A FINRA spokeswoman, Angelita Williams, explained that the rule Kaval violated is “long-established” and “makes clear the requirements relating to any employment or business done away from a securities firm.”

Williams didn’t respond to Singer’s charges that the enforcement action — a suspension of 20 business days and a $5,000 fine — was excessive.

Williams notes that the rule stipulates that no broker working for a firm can earn compensation or have “the reasonable expectation of compensation” from outside the firm.

“This is what FINRA wastes its time on?” Singer writes in his securities industry commentary, “Broke and Broker.”

Kaval earned $350 from his sports handicapping.