Making it to the top of Goldman Sachs brings wealth, prestige -- and apparently a waiver from Finra from taking the broker exams it regularly requires of others in the securities industry.The Financial Industry Regulatory Authority Inc. gave former U.S. senator and New Jersey Gov. Jon Corzine a pass from taking the Series 24 and Series 7 exams when he returned to the financial sector to head the now-bankrupt MF Global Inc. in 2010 after an 11-year break from the industry. After such a gap, Finra normally requires brokers to take these exams. The agency did require Mr. Corzine to take the Series 32 futures exam.
The fact that Mr. Corzine didn't have to requalify for registration probably didn't make a difference in the firm's recent collapse, costing 1,066 employees their jobs. But the perception of special treatment riles some advisers.
| Crony socialism at work, folks. The favored few get what you and I could never get. As Orwell correctly noted, all of us are equal, but a few of us are more equal. |
| And that's just the way the insiders want it... |
| He made sure Goldman Sachs was a key contributor to the Obama campaign in 2008. Then he ran New Jersey into the ground. Now he's bankrupted a major brokerage. |
One compliance consultant speculated that Mr. Corzine used his Finra connections to obtain his waivers. He had served on the board of NASD, which later became Finra.
"It can only be surmised that due to his former position on the board of governors, he was able to pull strings not available to the rest of us," said Brian Hamburger, managing director of MarketCounsel.
A lawyer for Mr. Corzine did not return a call for comment.
| Don't hold your breath... |
| Why would anyone get a waiver? 1500 plus waivers is a lot. Why is Finra handing them out? Isn't the whole point of Finra to make sure that people understand the law and the securities rules? |
Finra is not the only regulator that grants waivers. For instance, nearly every state exempts certified financial planners from the Series 65 licensing exam and allows other exceptions, too.
"It's a pretty standard practice," said Steven Thomas, director of Lexington Compliance and former chief compliance examiner in the South Dakota Division of Securities. "In a lot of cases, it's justified. [But] there would be no justification on why [Mr. Corzine] should get a waiver."
Ms. Condon said that the same standard applies to everyone seeking to skip exams.
"Each request for a waiver is reviewed and considered against the detailed criteria posted on Finra.org," Ms. Condon wrote in an e-mail. "It includes general experience, education and regulatory or legal experience."
| If a person has the experience and education, have them take the exam anyway -- that person should ace it, right? The whole unspoken point of waivers is to let people get in on the inside -- to do favors, and to receive favors in return. |
During his time in government, Mr. Corzine was not completely separated from financial industry matters.
| Of course not; that was the point of his being a senator. |
As governor, of course, he had ultimate responsibility for New Jersey's Bureau of Securities.
But Mr. Thomas argues that Mr. Corzine's government service didn't expose him to the rapidly changing environment of financial regulations.
David Tittsworth, executive director of the Investment Adviser Association, said that Mr. Corzine probably would have passed his exams if he had been required to take them.
| So why not have him take the exam? |
"As far as I know, Bernie Madoff passed the Series 7 examination," Mr. Tittsworth wrote in an e-mail. "He was chairman of Nasdaq, and his family held various roles at Finra/NASD. None of those factors stopped him from perpetrating fraud. Instead, all of those factors lent credibility to his resume."
Observers agree that Mr. Corzine's exam waivers probably had no effect on MF Global's collapse, which was caused by vast overleverage in European sovereign debt.