Quite simple. The government legislates that membership in a non-government entity is required to do business in a sector.
If you’re fined and don’t pay the fine to the entity, they revoke the membership and you are now breaking the law.
If you’re fined and don’t pay the fine to the entity, they revoke the membership and you are now breaking the law.
What is keeping FINRA's interest in following up with punishments of members?
You can have your ability to deal in the financial markets removed for a bunch of things but in particular any sort of official sanction for dishonesty or fraud. There was a senior portfolio manager at Blackrock who was banned from the securities industry for ticket fraud on his daily commute (albeit over a number of years). https://www.theguardian.com/business/2014/dec/15/ca-ban-4300...
But yes, in an ideal world it wouldn't work this way. who watches the watchmen? If FINRA isn't regulated, then they can do what they like.
In fact, FINRA itself was only established in 2007; the previous self-regulatory organization was the National Association of Securities Dealers, NASD - you may have heard of their Automated Quotation service, NASDAQ. FINRA was created after a long period of the SEC criticizing NASD for prioritizing the good of its business over effective self-regulation (see e.g. https://www.washingtonpost.com/archive/business/1994/11/15/s... and https://apnews.com/article/2d710b55afae651b8ad0737477ba2d79).
This comes from a long line of trade houses, literally spanning back 1000s of years. Trades have regulated themselves since before governments existed.
Not even remotely. Guilds followed states, and were usually under the purview of and regulated by cities.
I swear by Apollo Healer, by Asclepius, by Hygieia, by Panacea, and by all the gods and goddesses, making them my witnesses, that I will carry out, according to my ability and judgment, this oath and this indenture.
To hold my teacher in this art equal to my own parents; to make him partner in my livelihood; when he is in need of money to share mine with him; to consider his family as my own brothers, and to teach them this art, if they want to learn it, without fee or indenture; to impart precept, oral instruction, and all other instruction to my own sons, the sons of my teacher, and to indentured pupils who have taken the Healer’s oath, but to nobody else.
I will use those dietary regimens which will benefit my patients according to my greatest ability and judgment, and I will do no harm or injustice to them.[7] Neither will I administer a poison to anybody when asked to do so, nor will I suggest such a course. Similarly I will not give to a woman a pessary to cause abortion. But I will keep pure and holy both my life and my art. I will not use the knife, not even, verily, on sufferers from stone, but I will give place to such as are craftsmen therein.
Into whatsoever houses I enter, I will enter to help the sick, and I will abstain from all intentional wrong-doing and harm, especially from abusing the bodies of man or woman, bond or free. And whatsoever I shall see or hear in the course of my profession, as well as outside my profession in my intercourse with men, if it be what should not be published abroad, I will never divulge, holding such things to be holy secrets.
Now if I carry out this oath, and break it not, may I gain for ever reputation among all men for my life and for my art; but if I break it and forswear myself, may the opposite befall me.[6] – Translation by W.H.S. Jones.
> In a 2000 survey of US medical schools, all of the then extant medical schools administered some type of profession oath. Among schools of modern medicine, sixty-two of 122 used the Hippocratic Oath, or a modified version of it. The other sixty schools used the original or modified Declaration of Geneva, Oath of Maimonides, or an oath authored by students and or faculty. All nineteen osteopathic schools used the Osteopathic Oath.
The point I was trying to make was that guilds were not the first form of trades self regulating.
1. How is that of any relevance to my comment?
2. Are you somehow ahistorically asserting that medecine was the first trade to regulate itself?
And artisan guilds predate medieval europe by thousands of years.
In the city I was born which was founded around 2000 years ago and got it's first major in the 14th century, most of the majors back then there were guild masters (the city only later become a trading point).
The city I currently live in got it's first major in the 13th century who was also a guild master.
Infact the US Federal Reserve is not a government entity - its a private (and public somehow).
https://www.stlouisfed.org/in-plain-english/who-owns-the-fed...
This contrasts (as far as I can tell) with Australia, where the central bank is 100% state-owned.