Who's Who In Finra's New Fraud Detection Unit
The SEC isn't the only financial regulator hiring and redeploying staff in hopes of becoming a smarter and tougher fraud cop. Finra, Wall Street's self-regulatory body, has assembled a new fraud detection team of more than 100 professionals, mostly drawn from pre-existing departments that the agency began combining late last year.
The 114-person department is separate from the enforcement and market regulation offices of FINRA, which bring cases and perform examinations. But the new department has been given near carte blanche to pursue fraud after FINRA missed the multibillion dollar Ponzi schemes of Madoff and Allen Stanford, whose broker-dealers were registered FINRA members and under its supervision.
The new Office of Fraud Detection and Market Intelligence combines Finra's insider trading, fraud referral group and office of whistleblower. Its director is Cameron Funkhouser, a veteran Finra investigator. His highest-ranking deputies are Tony Cavallaro and Paul Lane, both former Manhattan district attorneys; Sam Draddy, a former prosecutor in Baltimore and SEC branch chief; and Joe Ozag, a 10-year Finra executive and former Capitol Hill detective.
The department is taking a higher profile on the heels of the departure of two of Finra's top officials. Susan Merrill, head of enforcement, left earlier this month to join law firm Bingham McCutchen. Robert Errico, who as head of member regulation was responsible for the authority's surveillance and annual examinations of broker-dealers, officially stepped down in March but remains a consultant pending a successor.