If Wall Streets wants to jerk itself around and play nasty financial games within its own infrastructure then go ahead, but, mandatory arbitration standards to play investors for fools is simply outrageous. Arbitration in a den of thieves is one thing, but, to bring it to the market place is quite something else entirely.
...So, let’s get this straight. (click title to entry - thank you) It’s perfectly fine for investors and financial-firm employees who have a dispute with Wall Street to be forced into an arbitration process administered by the Financial Industry Regulatory Authority, Wall Street’s self-regulatory organization.
Yet, when the Carlyle Group, a private-equity firm seeking to sell its shares to the public, tried to require its new investors to use that same arbitration process to resolve any potential disputes, the powers that be called foul. The Securities and Exchange Commission even threatened to block the initial public offering unless an arbitration requirement was removed from its registration documents.
So there is the question: How can a forced-arbitration process be acceptable for the millions of people who do business with or work on Wall Street and then be deemed unacceptable for people who choose to buy stock in Carlyle?
The answer, of course, is that the Wall Street arbitration process is not the least bit fair -- for anyone, including financial workers and Carlyle’s potential investors. What the Carlyle incident shows definitively is that financial firms’ kangaroo-court system -- Finra gets almost $1 billion a year from Wall Street -- must be ended, allowing those with disputes to use the judicial system like everyone else....
It has been a long road for Carlyle to get this far along in the process...
Carlyle to Pay $20 Million to Resolve Cuomo Probe (click here)
31st May 2009
By Karen Freifeld
June 1, 2009
June 1, 2009
May 14 (Bloomberg) — Carlyle Group agreed to end “pay to play” tactics in its public pension fund business and pay $20 million to resolve a corruption probe by New York Attorney General Andrew Cuomo.
Under the agreement, Carlyle will adopt new a public pension fund “code of conduct,” which bans investment firms from using placement agents or other third parties to negotiate with public pension funds to obtain investments. It also prohibits firms from doing business with a public pension fund for two years after the firm or its employees make a campaign contribution to a public official who can influence the fund’s investment decisions.
“By banning campaign contributions to those who have sway over pension funds and eliminating the third-party intermediaries that have become dens of corruption, we will ensure reform,” Cuomo said in a statement. “I commend Carlyle for being the first to embrace the Reform Code and leading the industry toward critical change of the public pension investment system.”
Carlyle executives will not be subject to any criminal liability, Cuomo said at a press conference. Carlyle is the second-biggest private equity firm after New York-based Blackstone Group LP. Founded by David Rubenstein with William Conway and Daniel D’Aniello in 1987, it manages about $85.5 billion in assets. …
Above the law. Wall Street wants to be above the law and all powerful to control their own outcomes while leaving 'the losers' in their dust.
Arbitration. I tell you what. Why doesn't Carlyle write its first profit and loss statements to investors now so they know exactly how much they will lose in the not to distant future. Sound like a plan? At least it would be an honest one.
