This article has been revised to reflect the following correction:
Correction: September 2, 2013
An earlier version of this article misidentified the features available on three e-reader models used in a price comparison. The Kindle Paperwhite, the basic Kobo e-reader and the Sony PRS-T2 have monochrome screens, not color screens.
Michael de la Merced contributed reporting.
Richard Perry/The New York Times Uber, like the other services, does not have its own fleet of cars. The company teams with existing luxury car services and acts as a digital dispatcher for people booking a car through its mobile app.Last week, when I arrived at the Los Angeles airport on a flight from San Francisco, I made my way to the taxi stand and waited 10 minutes for a cab. Just as I was about to hop in, the driver and the dispatcher began fighting over whose job it was to put my suitcase in the trunk. After a few minutes, I dealt with the bag myself. We then drove off in a filthy taxi that smelled like cigarette smoke and had suspension so old that it felt as if it had square wheels.
This made me think once again: the taxi industry is ripe for disruption.
Several companies in Silicon Valley — like Uber, Lyft and Sidecar — are acting on that very thought.
Uber, like the other services, does not have its own fleet of cars. The company teams with existing luxury car services and acts as a digital dispatcher for people booking a car through its mobile app.
Although Uber determines price the same way taxis do, calculating fares by time and distance, the service can cost 50 percent more than a normal city cab. Another service offered by Uber, called UberX, offers passengers a lower-cost ride in hybrid cars and is comparably priced to traditional taxis.
But companies like Uber are continually confronting the obstacle of entrenched government bureaucracy, resistant unions of taxi drivers and dispatchers, and overlapping and sometimes conflicting systems of state and city regulation.
The latest roadblocks have come up in Los Angeles, where Uber began offering its service in March.
Travis Kalanick, the company’s co-founder and chief executive, said it received a cease-and-desist letter from the city of Los Angeles, “even though this is not under their jurisdiction.” He added, “The taxi industry feels it is getting disrupted and they are doing whatever they can with their lobbying relationships to try and stop us.”
The letter, issued by the Los Angeles Transportation Department, says that Uber is “operating an unlicensed commercial transportation service” in the city. Jonathan Hui, an agency spokesman, wrote in an e-mail that it was working with the mayor’s office “to determine ways to address ride-sharing companies,” but he declined to comment further.
William Rouse, general manager of Yellow Cab in Los Angeles, one of the largest taxi companies in the city, and president of the Taxicab, Limousine and Paratransit Association, a trade group, said that making sure taxis were officially licensed was a matter of public safety.
“Our roadways are a scarce resource,” he said. “When you have an oversupply of taxi cabs, you have more congestion, depressed driver incomes and poor service. It’s also an issue of public safety, where drivers aren’t insured and there are felons driving some of these ride-sharing apps’ cars.”
Uber and other ride-sharing apps say that all their cars are insured over the required taxi insurance limits and that drivers must undergo stringent background checks.
“This isn’t about safety,” said John Zimmer, co-founder of Lyft, which also received a cease-and-desist letter from Los Angeles regulators. Mr. Zimmer said he believed the real opposition from taxi companies was not about customer safety, but fear of competition.
Mr. Zimmer also pointed out that state regulators had approved his service.
The California Public Utilities Commission, he said, lets it operate “because we go above and beyond all of their guidelines.”
Uber has been dragged through regulatory hurdles in New York City since its introduction there in 2011. But last month Uber had a victory of sorts, winning a ruling allowing it to operate in Cambridge, Mass. This came after city officials, at the behest of local taxi companies, tried to ban Uber even though state regulators had already approved the operations of such ride-sharing services statewide.
The Federal Trade Commission has also recently issued a statement supporting the services; the agency said trying to snuff out ride-sharing apps would stifle competition and could hurt consumers.
The controversy in Los Angeles is par for the course for start-ups that have come up against regulators. They have been sued or received cease-and-desist letters from almost every city they operate in.
When it comes to protecting customers on pricing and overcharging, taxi regulation makes sense. But in some instances, regulatory bodies have done more harm than good. In 2009, for example, more than 30 people in Washington, including at least one city official, were indicted on bribery charges during talks of regulatory change.
Some lobbying groups, meanwhile, are using fear tactics. In March, Mr. Rouse’s taxi industry group issued a news release warning that companies like Uber and Lyft were “rogue transportation apps” and a “threat to public safety.” The release said that arguments involving payment “could turn violent,” but offered no examples.
Mr. Kalanick of Uber said cities should simply let the customer decide. “The taxi groups are so protected through these regulations that they do not have to offer a better service to customers.”
Mr. Rouse acknowledged that cab companies needed to do a better job, and said he was working with cabdrivers to increase quality of service. But he said taxi groups “will continue to advocate for law enforcement against these ride-sharing apps.”
Although the services do not share figures on how popular they are, the opposition suggests they are posing a real threat. As for me, I’m glad when I have a choice.
To get to the San Francisco airport, before my recent flight to Los Angeles, I called an Uber car. When the driver picked me up, he was nervous about taking me to the airport, he said, because its police were ticketing Uber drivers. The service is allowed in San Francisco, but the airport police follow different rules.
“I can take you,” the driver earnestly said. “But we will have to pretend to be related so I don’t get a ticket.”
When we pulled up to the airport, he got out of the car with great ceremony, handed me my bags and followed his script. “Have a safe flight!” he said, giving me a big hug while peering sideways for signs of the law. “I’ll see you soon.”
E-mail: bilton@nytimes.com
Bill Pugliano/Getty ImagesMany in Detroit were alarmed recently when, seemingly out of nowhere, a $3.5 billion hole appeared in the city’s pension system.Until mid-June, there was one ray of hope in Detroit’s gathering storm: For all the city’s problems, its pension fund was in pretty good shape. If the city went under, its thousands of retired clerks, police officers, bus drivers and other workers would still be safe.
Then came bad news. Seemingly out of nowhere, a $3.5 billion hole appeared in Detroit’s pension system, courtesy of calculations by a firm hired by the city’s emergency manager.
Retirees were shaken. Pension trustees said it must be a trick. The holders of some of Detroit’s bonds realized in shock that if the city filed for bankruptcy — as it finally did on Thursday — their claims would have even more competition for whatever small pot of money is available.
But Detroit’s pension revelation is nothing new to many people who run pension plans for a living, the math-and-statistics whizzes known as actuaries. For several years, little noticed in the rest of the world, their staid profession has been fighting over how to calculate the value, in today’s dollars, of pensions that will be paid in the future.
It may sound arcane, but the stakes for the country run into the trillions of dollars. Depending on which side ultimately wins the argument, every state, city, county and school district may find out that, like Detroit, it has promised more to its retirees than it ever intended or disclosed. That does not mean all those places will declare bankruptcy, but many have more than likely promised their workers more than they can reasonably expect to deliver.
The problem has nothing to do with the usual padding and pay-to-play scandals that can plague pension funds. Rather, it is the possibility that a fundamental error has for decades been ingrained into actuarial standards of practice so that certain calculations are always done incorrectly. Over time, this mistake, if that is what it is, has worked its way into generally accepted accounting principles, been overlooked by outside auditors and even affected state and municipal credit ratings, although the ratings firms have lately been trying to correct for it.
Since the 1990s, the error has been making pensions look cheaper than they truly are, so if a city really has gone beyond its means, no one can see it.
“When the taxpayers find out, they’re going to be absolutely furious,” said Jeremy Gold, an actuary and economist who for years has called on his profession to correct what he calls “the biases embedded in present actuarial principles.” In 2000, well before the current flurry of pension-related municipal bankruptcies, he wrote his doctoral dissertation on how and why conventional pension calculations run afoul of modern economic principles.
Mr. Gold made his prediction about taxpayer fury in an interview a number of years ago in which he also explained why he had chosen his topic. He said he hoped to help put a stop to the errors he saw his colleagues making before pension problems that were already starting to brew then boiled over and a furious public heaped blame, scorn and legal liability on the profession.
When a lender calculates the value of a mortgage, or a trader sets the price of a bond, each looks at the payments scheduled in the future and translates them into today’s dollars, using a commonplace calculation called discounting. By extension, it might seem that an actuary calculating a city’s pension obligations would look at the scheduled future payments to retirees and discount them to today’s dollars.
But that is not what happens. To calculate a city’s pension liabilities, an actuary instead projects all the contributions the city will probably have to make to the pension fund over time. Many assumptions go into this projection, including an assumption that returns on the investments made by the pension fund will cover most of the plan’s costs. The greater the average annual investment returns, the less the city will presumably have to contribute. Pension plan trustees set the rate of return, usually between 7 percent and 8 percent.
In addition, actuaries “smooth” the numbers, to keep big swings in the financial markets from making the pension contributions gyrate year to year. These methods, actuarial watchdogs say, build a strong bias into the numbers. Not only can they make unsustainable pension plans look fine, they say, but they distort the all-important instructions actuaries give their clients every year on how much money to set aside to pay all benefits in the future.
If the critics are right about that, it means even the cities that diligently follow their actuaries’ instructions, contributing the required amounts each year, are falling behind, and they don’t even know it.
These critics advocate discounting pension liabilities based on a low-risk rate of return, akin to one for a very safe bond.
In the years since his doctoral research, Mr. Gold and like-minded actuaries and economists have been presenting their ideas in professional forums and in scholarly papers crammed with equations and letters of the Greek alphabet. They have won converts, but so far no changes in the actuarial standards. Their theoretical arguments tend to fly over the head of the typical taxpayer.
Year after year there has been consistent resistance from the trustees of public pensions, the actuarial firms that advise them and the unions that represent public workers. The unions suspect hidden agendas, like cutting their benefits. The actuaries say they comply fully with all actuarial standards of practice and pronouncements of the Governmental Accounting Standards Board. When state and local governments go looking for a new pension actuary, they sometimes post ads saying that candidates who favor new ways of calculating liabilities need not apply.
A few years ago, with the debate still raging and cities staggering through the recession, one top professional body, the Society of Actuaries, gathered expert opinion and realized that public pension plans had come to pose the single largest reputational risk to the profession. A Public Plans Reputational Risk Task Force was convened. It held some meetings, but last year, the matter was shifted to a new body, something called the Blue Ribbon Panel, which was composed not of actuaries but public policy figures from a number of disciplines. Panelists include Richard Ravitch, a former lieutenant governor of New York; Bradley Belt, a former executive director of the Pension Benefit Guaranty Corporation; and Robert North, the actuary who shepherds New York City’s five big public pension plans.
This project has drawn fire from a large number of public pension officials. They recently wrote the Society of Actuaries a joint letter, urging it to reconstitute the Blue Ribbon Panel by adding more people “who can provide insight” into the many benefits of the current method, and expressed great concern about switching to a new one that could cause confusion and volatility. Of possible interest to the bondholders and taxpayers of Detroit, they also said that as fiduciaries they were required to “put the interest of all plan participants and beneficiaries above their own interests or those of any third parties.”
Much of the theoretical argument for retaining current methods is based on the belief that states and cities, unlike companies, cannot go out of business. That means public pension systems have an infinite investment horizon and can pull out of down markets if given enough time.
As Detroit has shown, that time can run out.
Monica Davey contributed reporting.
Bill Pugliano/Getty ImagesMany in Detroit were alarmed recently when, seemingly out of nowhere, a $3.5 billion hole appeared in the city’s pension system.Until mid-June, there was one ray of hope in Detroit’s gathering storm: For all the city’s problems, its pension fund was in pretty good shape. If the city went under, its thousands of retired clerks, police officers, bus drivers and other workers would still be safe.
Then came bad news. Seemingly out of nowhere, a $3.5 billion hole appeared in Detroit’s pension system, courtesy of calculations by a firm hired by the city’s emergency manager.
Retirees were shaken. Pension trustees said it must be a trick. The holders of some of Detroit’s bonds realized in shock that if the city filed for bankruptcy — as it finally did on Thursday — their claims would have even more competition for whatever small pot of money is available.
But Detroit’s pension revelation is nothing new to many people who run pension plans for a living, the math-and-statistics whizzes known as actuaries. For several years, little noticed in the rest of the world, their staid profession has been fighting over how to calculate the value, in today’s dollars, of pensions that will be paid in the future.
It may sound arcane, but the stakes for the country run into the trillions of dollars. Depending on which side ultimately wins the argument, every state, city, county and school district may find out that, like Detroit, it has promised more to its retirees than it ever intended or disclosed. That does not mean all those places will declare bankruptcy, but many have more than likely promised their workers more than they can reasonably expect to deliver.
The problem has nothing to do with the usual padding and pay-to-play scandals that can plague pension funds. Rather, it is the possibility that a fundamental error has for decades been ingrained into actuarial standards of practice so that certain calculations are always done incorrectly. Over time, this mistake, if that is what it is, has worked its way into generally accepted accounting principles, been overlooked by outside auditors and even affected state and municipal credit ratings, although the ratings firms have lately been trying to correct for it.
Since the 1990s, the error has been making pensions look cheaper than they truly are, so if a city really has gone beyond its means, no one can see it.
“When the taxpayers find out, they’re going to be absolutely furious,” said Jeremy Gold, an actuary and economist who for years has called on his profession to correct what he calls “the biases embedded in present actuarial principles.” In 2000, well before the current flurry of pension-related municipal bankruptcies, he wrote his doctoral dissertation on how and why conventional pension calculations run afoul of modern economic principles.
Mr. Gold made his prediction about taxpayer fury in an interview a number of years ago in which he also explained why he had chosen his topic. He said he hoped to help put a stop to the errors he saw his colleagues making before pension problems that were already starting to brew then boiled over and a furious public heaped blame, scorn and legal liability on the profession.
When a lender calculates the value of a mortgage, or a trader sets the price of a bond, each looks at the payments scheduled in the future and translates them into today’s dollars, using a commonplace calculation called discounting. By extension, it might seem that an actuary calculating a city’s pension obligations would look at the scheduled future payments to retirees and discount them to today’s dollars.
But that is not what happens. To calculate a city’s pension liabilities, an actuary instead projects all the contributions the city will probably have to make to the pension fund over time. Many assumptions go into this projection, including an assumption that returns on the investments made by the pension fund will cover most of the plan’s costs. The greater the average annual investment returns, the less the city will presumably have to contribute. Pension plan trustees set the rate of return, usually between 7 percent and 8 percent.
In addition, actuaries “smooth” the numbers, to keep big swings in the financial markets from making the pension contributions gyrate year to year. These methods, actuarial watchdogs say, build a strong bias into the numbers. Not only can they make unsustainable pension plans look fine, they say, but they distort the all-important instructions actuaries give their clients every year on how much money to set aside to pay all benefits in the future.
If the critics are right about that, it means even the cities that diligently follow their actuaries’ instructions, contributing the required amounts each year, are falling behind, and they don’t even know it.
These critics advocate discounting pension liabilities based on a low-risk rate of return, akin to one for a very safe bond.
In the years since his doctoral research, Mr. Gold and like-minded actuaries and economists have been presenting their ideas in professional forums and in scholarly papers crammed with equations and letters of the Greek alphabet. They have won converts, but so far no changes in the actuarial standards. Their theoretical arguments tend to fly over the head of the typical taxpayer.
Year after year there has been consistent resistance from the trustees of public pensions, the actuarial firms that advise them and the unions that represent public workers. The unions suspect hidden agendas, like cutting their benefits. The actuaries say they comply fully with all actuarial standards of practice and pronouncements of the Governmental Accounting Standards Board. When state and local governments go looking for a new pension actuary, they sometimes post ads saying that candidates who favor new ways of calculating liabilities need not apply.
A few years ago, with the debate still raging and cities staggering through the recession, one top professional body, the Society of Actuaries, gathered expert opinion and realized that public pension plans had come to pose the single largest reputational risk to the profession. A Public Plans Reputational Risk Task Force was convened. It held some meetings, but last year, the matter was shifted to a new body, something called the Blue Ribbon Panel, which was composed not of actuaries but public policy figures from a number of disciplines. Panelists include Richard Ravitch, a former lieutenant governor of New York; Bradley Belt, a former executive director of the Pension Benefit Guaranty Corporation; and Robert North, the actuary who shepherds New York City’s five big public pension plans.
This project has drawn fire from a large number of public pension officials. They recently wrote the Society of Actuaries a joint letter, urging it to reconstitute the Blue Ribbon Panel by adding more people “who can provide insight” into the many benefits of the current method, and expressed great concern about switching to a new one that could cause confusion and volatility. Of possible interest to the bondholders and taxpayers of Detroit, they also said that as fiduciaries they were required to “put the interest of all plan participants and beneficiaries above their own interests or those of any third parties.”
Much of the theoretical argument for retaining current methods is based on the belief that states and cities, unlike companies, cannot go out of business. That means public pension systems have an infinite investment horizon and can pull out of down markets if given enough time.
As Detroit has shown, that time can run out.
Monica Davey contributed reporting.
UrencoAn inspection at what will be Urenco’s largest enrichment center, now under construction in Eunice, N.M.CAPENHURST, England — The first thing you notice when entering Building E23 on a tightly guarded site here in northwest England is the loud tick-tock. The sound resonates throughout the long, low-slung building where, behind secured doors, sit row upon row of tall thin tubes.
That ticking means the building’s radiation detection system is working — crucial comfort. Inside each cylinder is a centrifuge, spinning a gaseous form of uranium to give it the atomic boost it needs to be used as nuclear reactor fuel.
The company that operates this uranium enrichment center, Urenco, is the world leader in the field. It is also plumply profitable. So why are its owners eager to sell it?
The answer, as with many things involving nuclear power, is a combination of economics, geopolitics and the Promethean prospect of an energy source that is as potentially green and abundant as deadly dangerous.
Urenco was formed by treaty in 1971 when Britain, West Germany and the Netherlands decided for strategic and business reasons to combine their uranium enrichment programs. The company is still owned by the British and Dutch governments, with one-third each, and with the German third held jointly by two big utility companies, E.On and RWE.
Urenco now has four enrichment plants — in Britain, the Netherlands and Germany — selling fuel for civilian energy purposes around the world, capturing nearly a third of the global market. It is also heavily investing in an American centrifuge complex in Eunice, N.M., that will eventually be its largest plant.
“Over the years we have developed generations of these machines,” said Helmut Engelbrecht, Urenco’s chief executive in a telephone interview. “If you do something continuously you always improve.”
Besides fuel, Urenco’s centrifuges spin off fairly good money: revenue of 1.6 billion euros, or $2.1 billion last year, yielding earnings of 402 million euros, for a profit margin of 25 percent. And its order book stands at 18 billion euros, which translates to at least 10 years of steady work.
Analysts estimate Urenco’s market value at about 10 billion euros. For all that momentum, though, the company is at a crossroads. Growth may flatten in the next couple of years, executives say, mainly because Japan — a major user of nuclear power until the 2011 Fukushima Daiichi disaster — has shut down its reactors, taking about 10 percent of the world’s nuclear energy generating capacity offline. And the Japanese have stockpiled substantial amounts of fuel for the day, if ever, that those reactors go back into operation.
The British government, intent on cleaning up its budget by selling state-owned enterprises, said in March that it had hired Morgan Stanley to look into disposing of all or part of its Urenco stake. In some respects Urenco is an easier business to sell than, say, the Royal Mail, because it has an internationally marketable product and a relatively small work force — about 1,400 employees.
UrencoUrenco’s New Mexico facility. The company sells nearly a third of the world’s reactor fuel; it had $2.1 billion in revenue in 2012.The German utilities E.On and RWE have hired Bank of America as their adviser. With the German government’s having decided to get out of the nuclear industry in 2011 after Fukushima, the sale of their Urenco stakes would help the power companies beef up their thin balance sheets.
A sale became more likely Thursday, when the Dutch government said it wanted to sell its shares, as long as “the public interest in terms of nonproliferation, nuclear safety and supply security” could be safeguarded.
A person close to planning, who insisted on anonymity because of the delicacy of the matter, said if things went smoothly a sale might occur either late this year or in the first half of 2014.
“Nuclear strategies have changed,” said Michael Kruse, a consultant on nuclear issues for the management consultant Arthur D. Little in Frankfurt. “Governments no longer think they need to be in this business,” he said, “and utilities in several countries want out after Fukushima.”
People in the industry say the most likely buyers would be companies already in the industry that might want to offer clients fuel along with nuclear power stations. Areva, a French giant, might fit that bill. So might Toshiba of Japan, which is studying building nuclear plants in Britain. Still, “there are in my view not many companies that can buy Urenco,” Mr. Kruse said.
Urenco’s chief executive, Mr. Engelbrecht, in a presentation to analysts in March, declined to discuss a possible sale of the company, saying he would leave that to the shareholders. But he argued that fast-growing emerging economies would take up the slack left by Japan.
Already, he noted, China is in the midst of a nuclear plant building boom, and India is also seriously pursuing nuclear power. In the Middle East, Urenco has a contract to enrich uranium for the plants in Abu Dhabi being built by South Korean contractors. Countries that are seeing 10 percent to 15 percent increases in electricity demand and that have major air pollution problems “are all betting on nuclear, and that is where we believe the future of our business will be,” Mr. Engelbrecht said.
The company has 50 customers in 17 countries, which it denotes with little plaques on a wall in the enrichment center’s entranceway. The honorees include the Indian Point nuclear plant in Buchanan, N.Y.; Wolf Creek in Burlington, Kan., and the Olkiluoto plant on an island off western Finland.
Even if the potential buyers are a small pool, analysts say that buying into Urenco would present a rare opportunity. Urenco’s centrifuge technology, honed over several generations of machines, is considered the most efficient way to enrich uranium.
Urenco plants receive shipments of uranium hexafluoride, a granular substance derived from uranium ore, which is turned into gas by heating it. The gas is then piped into the centrifuges which use their spinning power to separate out the lighter and more reactive uranium 235 isotopes. When the gas is cooled again, it settles out as a solid resembling grains of sugar.
Urenco’s process increases the proportion of U235, raising it from a starting point of about 0.7 percent to end up about 4 percent — a suitable level for reactor fuel, but only a small fraction of the concentration needed to make a nuclear weapon.
Urenco’s enriched uranium is put in canisters that then go to a fuel fabricator, where it is converted into pellets and loaded into fuel rods which are then delivered to the power plants.
The centrifuges rarely stop at the Capenhurst plant, which sprawls over about 170 acres in what has long been a munitions testing site surrounded by cow pastures and farm ponds. The newest group of cascades — as the array of centrifuges is known — in the Capenhurst building was installed 15 years ago and “has never been brought to rest,” said Geoff Owens, a Urenco engineer.
Areva, of France, which has about 10 percent of the world market for nuclear fuel sales, began switching over to Urenco’s technology in the mid-2000s for its uranium enrichment. Areva’s and Urenco’s owners each have a 50 percent stake in a company called Enrichment Technology, based in Almelo, the Netherlands, that develops and makes the centrifuges.
It is very difficult for competitors to gain a foothold in Urenco’s business. The details of the technology are closely guarded, and the uranium trade is tightly controlled and regulated. “There are massive barriers to entry,” said Harold Hutchinson, an analyst at Investec in London.
Urenco produces the steady, long-run returns that might be valued by pension funds and private equity groups. But worries that the wrong people may gain access to Urenco’s world-leading technology will probably mean that the shareholders — and the British, Dutch and German governments — will be highly selective about who can buy stakes.
While Asian or Middle Eastern sovereign wealth funds are said to be among those interested, only companies from North America, western Europe, Japan, or possibly, South Korea, are likely to pass muster, people in the industry say.
“There are an awful lot of security concerns which arise around these types of businesses,” said Fiona Reilly, who heads the nuclear industry practice at Norton Rose, a law firm in London.
Besides potential candidates like Areva and Toshiba, another shopper might be Cameco, a big Canadian uranium mining outfit. It has shown interest in working with Urenco in the past and already uses a plant in Preston, England, that turns refined uranium ore into the uranium hexafluoride that could serve as feedstock for Urenco’s nearby Capenhurst complex.
“Enrichment is a potential growth area for us,” Gord Struthers, a Cameco spokesman said in an e-mail, while declining to comment on whether an offer might be imminent. “We are watching what happens with Urenco closely.”
Wall Street’s self-regulator is planning to exercise some new muscle.
Richard G. Ketchum, the head of the Financial Industry Regulatory Authority, said in an interview on Tuesday that he would ramp up scrutiny of high-speed trading and a batch of complex products. Finra, Mr. Ketchum said, would take aim at so-called leveraged loans and collateralized loan obligations, along with the potential conflicts that brokerage firms face in pitching their own investments over rivals’ products.
“We’re going to be very focused on conflicts of interest,” said Mr. Ketchum, the chairman and chief executive of Finra. In a statement, Firna added that it would “pursue potential cross-market abuses and refine its surveillance patterns based on new threat scenarios and regulatory intelligence.”
The expanded focus comes as Finra announced on Tuesday that it filed more than 1,500 enforcement actions against financial firms and brokers in 2012, an all-time record for the regulator. Finra, which barred nearly 300 people from the industry, levied more than $100 million in penalties.
“It’s nice to see an upward trajectory,” Mr. Ketchum said.
A private, nonprofit organization, Finra monitors 600,000-plus stockbrokers. The group’s enforcement arm has struggled to shake the perception that brokers and their firms, which pay for Finra’s operations through fees and dispatch representatives to sit on the board, have muzzled the watchdog.
But Finra, Mr. Ketchum noted, is now tracking bigger game. He highlighted the range of cases filed last year, a collection of actions against some of the biggest names on Wall Street. Firna last year sanctioned Citigroup, Morgan Stanley and UBS, among others, for improper sales tactics. Goldman Sachs paid an $11 million fine for failing to keep an eye on its research analysts.
The agency’s enforcement unit, run by J. Bradley Bennett, also waded into the minutiae of Wall Street products, filing cases involving structured investments and leveraged exchange-traded funds. Finra said on Tuesday that the unit could strike a more aggressive tone in 2013, investigating other products and the high-speed trading industry.
“What I like about the cases we brought is the focus on complex products,” Mr. Ketchum said.
