Rich and Co.

Why Is Industry Press Looking Away on BrightScope Principal’s Past FINRA Violations?

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The main lesson is that the retirement community cannot depend on the current industry media for problem-solving, critcal reporting,  or concern for ethical problems.   Serving advertisers, PR campaigns and the status quo are their priorities.  This is understandable and predicatable.  However, we in the community must engage in self-regulation and doing our own research.

We recently discovered and shared that BrightScope owners Mike and Ryan Alfred have the same U-5 violations on their FINRA records.

In discussions with industry media representatives we found the  responses to be:

  1. “Blame the messenger” – Our motives were questioned.  We have no competitive businesses with BScope
  2. Defend the Ryan’s behavior. “They settled the complaint.”
  3. Ignore the matter – “It’s not newsworthy.”

We expected these responses.  This is how people like Madoff get away with their scams — “The Bystander Effect.”   Even media professionals are afraid to challenge an aggressive PR campaign.  Fortunately, with social media these kinds of facts do not need editor and producer acceptance to be made known.

Here is our blog post with an instructive exchange.  Below are some comments from that blog post. 

“With regards to the FINRA fine, in most all serious violations like the Alfred’s Scam on their customer it is common the broker/dealer employer to contribute the majority of the fine since they have the deepest pockets.  In this case the customer was harmed to the amount of $1,000,000 in his written complaint.  This contingent liability goes against the broker/dealer during a GAAP audit.  So, in most all serious cases, the employers want the representatives [Michael S Alfred] gone ASAP.  An offer is presented such as “we the broker/dealer will contribute $100,000 towards settlement and not terminate you for dishonesty if you pay $30,000 and agree to resign.”  All compliance HR departs are able to read through the lines when someone like Michael Alfred is seeking a job.  They understand there is a problem with this person and they would not hire him despite his U5 stating the reason for departure as voluntary.”

“This is excellent reporting Rich & Co. Your article sheds a light not only on the Alfreds and their dishonestly but also it sheds a light on the media industry. First, there is very little fact checking probably because there is very little money to hire fact checkers like in the old print world days. Second, in this digital media world companies like BrightScope can hire Publicists who not only brokering favorable article to the digital media but also broker “affiliate advertising” relationships. You just watch Brightscope will have advertisements [click throughs] on RIABIZ, FORBES, MOTLEY and others.”


Written by Rich and Co.

May 22, 2011 at 3:47 pm

Posted in Uncategorized

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