| 04 December 2009

There's no gentle way to put this so we're just going to come out and say it: FINRA needs some PR help, fast. It's been a tough year for the Self-Regulatory Organization. So tough, in fact, that there may not be enough lipstick in the world to cover this pig.

We were saddened to see FINRA back-peddle on its earlier warnings about leveraged ETFs. We were more than a little shocked to hear about FINRA's embarrassing investment losses -- more than 27% last year alone. This caused us to be not the least bit amused that FINRA execs would spread out across the country to teach financial literacy, of all things.

Now we discover that FINRA execs have been paid quite handsomely for these efforts. Investment News scooped the story that 13 current and former execs were paid more than $1 million each in 2008.

While the FINRA execs might not believe us when we say this, it's true. We actually hate writing stories like this because we know that among the 2,800 FINRA employees nationwide there are probably a goodly number of do-gooders getting paid a rational salary to make the world safe for investors.

But not Michael Jones. He was a chief administrative officer for FINRA and he collected compensation, severance and accumulated benefits valued at $4.43 million before moving on, according to Investment News. They also discovered four current FINRA executives that made more than $1 million last year (including the chief of enforcement), and four others that made more than $800,000.

Big deal, you say? Wall Street Execs pull in ten times as much. True. But cops don't.

To put into perspective how whacky these compensation practices are, one need look no further than SEC Chairman Mary Schapiro. When she was FINRA's chief last year she made $3.3 million, plus another $7.2 million in accumulated retirement-plan benefits, for more than$10 million in compensation. Now she's running the SEC -- arguably a more effective and pervasive organization. She makes $162,900.

So we ask you -- is the fox running the henhouse? Well, ask FINRA. "FINRA is a trusted advocate for investors," they tell us on their Web site, "dedicated to keeping the markets fair, ensuring investor choice and proactively addressing emerging regulatory issues before they harm investors or the markets."

We can only imagine how much more "fair" the markets could be for us investors if the tens of millions of dollars of salary for executives was instead used to hire loads of really smart investigators, analysts and beat-walkers. Imagine we will.

Up next: $46 million in grant money for education efforts: what's the result?