Download Video Answers for Teachers

MODULE 06 - Rick Ketchum; Chairman and CEO of FINRA
Answer Sheet
1. What is the role of FINRA?
Answer:
FINRA provides investor protection in various ways.
2. How does FINRA operate?
Answer:
They make sure firms are following rules and regulations that are in place. Brokerage
firms also doing the right things for their clients;
They require broker dealers to take examinations.
They do market surveillance on the exchange markets.
3. What is the Dodd Frank Act?
Answer:
It was passed to increased government oversight of trading in complex derivatives. To try
and fill the holes in the regularity system; accounting games, derivatives, hedge fund
activity. Dodd Frank Act requires these activities to be regulated with the SEC so the
market can be protected in a more transparent way.
4. What is arbitration?
Answer:
Arbitration provides investors with a platform to resolve their disputes outside the courts
with someone in the industry in a low cost way.
5. What creative ways have been developed to eliminate fraud and to ensure that it doesn’t happen
again?
Answer:
FINRA instituted a whistleblower group; when you see something say something.
Mr. Ketchum has made sure that within the organization that there is coordination
across the organization they can act quickly.
Education foundation that tries to get information out to investors and to the public.
Need to improve financial capability to understand the right questions to ask and to
always ask questions and to always be suspicious.
6. What advice would you give to a new investor looking to invest in the markets?
Answer:
Always ask questions. Never put all your eggs in one basket; stay diversified. Ask yourself
the following questions before you invest:
a. What are you goals?
b. What are you willing to lose?
c. How much risk are you able to take