Lazaro quoted in On Wall Street about new FINRA CEO

Professor Lazaro was quoted in the On Wall Street article, Christine LazaroNew FINRA CEO will face thorny issues and rising criticism,” about FINRA’s newly named CEO, Robert Cook, and the issues he can expect to face when he takes over the brokerage industry regulator:

Christine Lazaro, director of the Securities Arbitration Clinic at St. John’s University School of Law, says preventing elder financial abuse has become an ever more important issue as more baby boomers enter retirement.

Under Ketchum, FINRA has made moves to buttress protections for older clients. Last year, the regulator launched a helpline that it says received more than 4,600 calls so far .

Lazaro also points to growing concerns about cybersecurity. In recent years, there have been high profile data breaches at firms like J.P. Morgan Chase and Morgan Stanley.

“There is a tremendous amount of confidential customer information at the firms,” she says.

There’s also a question as to what role does FINRA have in the ongoing debate over an industrywide fiduciary standard. The Department of Labor’s contentious rule, finalized in April, faces several lawsuits launched by industry trade groups. Meanwhile, the SEC, which is charged with creating a fiduciary rule under the Dodd-Frank Act, says it won’t finalize its own rule-making before Obama leaves office.

Lazaro says FINRA has an opportunity to set expectations for firms.

“The place for FINRA to act is really in terms of how it expects its member firms to manage conflicts of interest, in other words acting in the best interest of customers,” she says. “FINRA has long said it expects firms to act in the best interest of customers, but the question is how do you define best interest?”

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