Abshure vs. FINRA

Arkansas Securities Commissioner Heath Abshure’s one-year term as president of the North American Securities Administrators Association included numerous public statements questioning the effectiveness of the Financial Industry Regulatory Authority in regulating the securities industry nationally.

And he believes that his “vocal critiques” of FINRA are part of the reason that Stephens Inc. decided to file a complaint against him with the Arkansas Ethics Commission, speculation that Stephens’ General Counsel David Knight denied.

In fact, Knight said, he invited Abshure, as president of NASAA, to speak to the Securities Industry & Financial Markets Association.

As NASAA president, Abshure was particularly vocal in calling on the Securities & Exchange Commission to adopt new regulations limiting contracts that require disgruntled investors to take their disputes to FINRA for arbitration.

In October, he was interviewed by The Wall Street Journal as one of the state securities regulators encouraging FINRA to require brokerage firms to carry “an appropriate amount” of insurance to assure that arbitration awards to investors are paid.

As recently as Nov. 22, he was quoted in the WSJ as questioning FINRA’s “fast-track” program for cracking down on “high-risk brokers.”

“Arkansas Securities Commissioner Heath Abshure said it is hard to judge the results until Finra discloses more specifics about its enforcement procedures,” WSJ reporter Jean Eaglesham wrote. She then quoted Abshure as saying that FINRA was “trying to tout how effectively it regulates the industry by saying: ‘We’ve got this fast-track program, but we’re not going to tell you anything about it.’”