According to Andy Kroll at Mother Jones, FINRA is a private regulator within the industry charged with protecting consumers, but since it is often staffed with industry insiders and funded by the industry, it hardly does the job it’s intended to do. If it seems like there’s a conflict of interest in letting an industry group protect the consumers the industry might be able to make more money defrauding, POGO says that’s exactly the problem.

As POGO wrote in its letter to Congress, “the cozy relationship between FINRA and the securities industry has resulted in pervasive conflicts of interest, and ought to raise doubts about whether FINRA can ever be an effective regulator.”

Not that doubts about its conflicts of interest stopped President Obama from nominating its immediate past chair to run the Securities and Exchange Commission; once there, Mary Schapiro directed the staff to come to the now-infamous settlement with Bank of America over its failure to disclose the Merrill Lynch bonuses.

Other examples of FINRA’s ineffectiveness as a regulator abound: From missing the Madoff and Stanford Ponzi schemes to taking a hit to its own investment portfolio of half a billion dollars and then awarding its executives $30 million on bonuses, FINRA is often a reflection of the very self-governance problems in the financial services industry that are at the root of the call for further regulation.

Now FINRA is calling on the government to give it the authority to police investment advisers in addition to securities brokers, despite its track record of protecting the industry’s interests first and consumers’ interests second (if at all). The folks at POGO hope that Congress’ intention to pursue some sort of new consumer regulation doesn’t end up being an opportunity to outsource henhouse protection to the foxes already bedeviling it.

As Clusterstock noted, the fall of Enron occurred back in 2001 — but it’s still making news.

If Enron is any indication, we’ll be hearing about the collapsed businesses of the financial crisis for years to come.  The Enron bankruptcy seems like eons ago, but the fallout never ends.

Maybe. But where’s the legal fallout from the current financial crisis?

As we mentioned on Monday, save for Bernard Madoff, there haven’t been any high-profile prosecutions over the subprime mortgage market mess. Wouldn’t backdating financial reports to mask a bank’s failing situation, as apparently was the case with IndyMac, qualify as criminal? Enron failed after all the accounting tricks it used for years couldn’t hide its real situation anymore. Courts have found the actions of its top executives worthy of jail terms. When will we hear about bankers going to jail?

Enron’s bankruptcy should be small change, compared to a global financial crisis. Let’s see how far the fallout goes, this time around.

But that hasn’t ended the matter, according to The Journal:

The discovery that Countrywide Financial Corp. recorded phone conversations with borrowers in a controversial mortgage program that included public officials — and that those recordings have been destroyed — has prompted new congressional calls for more information about the program.

Rep. Darrell Issa of California, the ranking Republican on the House Oversight and Government Reform Committee, is trying to subpoena the remaining records of Countrywide’s VIP loan program.

If Countywide destroyed some records crucial to this case, it’s worth probing further. But it also raises the question — where are all the other investigations into the scandals of the subprime boom?

As Gillian Tett of the Financial Times pointed out recently, more than 1,000 savings and loan executives went to jail following that scandal in the late 1980s and 1990s. So far, convicted Ponzi schemer Bernard Madoff is the only high-profile fraudster behind bars, but that seems to be about it.

One reason why the Madoff drama has grabbed so much attention and already sparked a slew of books this month, is precisely because there are precious few other financiers behind bars, or facing momentous fines. Compared to the S&L days, the level of retribution so far seems almost non existent.

Here’s hoping the Republican lawmakers so zealous about their pursuit of the Countrywide VIP scandal apply that same enthusiasm to the rest of the financial mess. It’s something that, so far, just hasn’t happened.

Cheronda Guyton, a senior vice president responsible for commercial foreclosed properties, broke company rules barring personal use of bank property, Wells Fargo said in a statement Monday.

The Times reported last week that Guyton had been spotted by neighbors spending time at the Malibu Colony home with her family this summer. At a party in August, guests were ferried to the beach house from a yacht, residents of the enclave said.

The property’s former owners were victims of convicted swindler Bernie Madoff’s Ponzi scheme, and lost the home as a result.

This story pretty much has everything you might look for if you’re trying to follow the foreclosure crisis. An expensive second home, taken back by the bank. Bernie Madoff. A top executive of a bailed-out bank capitalizing on someone else’s foreclosure mess. The yacht that brought guests to the party.

And now it has something else as well: Someone at the bank appears to have paid the price for unacceptable behavior. With top executives of companies bailed out by the taxpayers still raking in big paychecks, that’s  definitely something we haven’t seen much in this crisis. Too bad it had to take over-the-top behavior like partying in someone’s foreclosed house for that to finally happen.

Some of the victims apparently were able to state the size of the annual returns they wanted from Madoff. Their accounts soon would reflect those returns, some of which regularly reached as high as 100 percent. The Journal cites people familiar with the investigation as its source.

That’s not quite the way investing works for most of us, which is why the SEC must be interested.

Here are some of the victims — who may not be victims after all — according to The Journal:

Jeffry Picower and Stanley Chais, two philanthropists who invested heavily with Mr. Madoff, and Carl Shapiro, one of the money manager’s oldest friends, are among at least eight Madoff investors and associates being scrutinized by the U.S. attorney’s office in Manhattan.

Lots of people have wondered how Madoff got away with his scheme for so long. If these allegations are true, it gives a clearer picture of how it happened. And, if proven, it also means that Madoff wasn’t the only criminal behind the scheme.

Madoff’s tickets were for two seats in the second row behind home plate in the Delta Club Platinum section at the new Citi Field. They had a face value of about $80,191, or $295 to $695 per single ticket.

Trustee Irving Picard has worked out a deal with the Mets to exchange Madoff’s seats for two less expensive ones a few sections over and a few rows back with a face value of $60,750.

The trustee would get about $20,000 for the difference between the platinum and gold seats, Vanderwal said in court.

Madoff’s tickets for Monday night’s first Mets home game of the season against the San Diego Padres were sold for $7,500 on eBay (EBAY.O) on Sunday. The Mets lost 6-5.

His tickets for the rest of the season will now be made available for bidding.

This should be some small consolation for Mets fans who lost their savings to Madoff.

Court papers filed on Monday state that Madoff and his lawyer say the Manhattan penthouse and the millions held in accounts of Madoff’s wife, Ruth, are not subject to seizure. The court papers say Madoff claims the apartment and the money are unrelated to a $50 billion fraud Madoff has been accused of carrying out.

Wait until Federal Reserve Chairman Ben Bernanke, who lashed out at AIG today, hears about this one.

Clusterstock has the indictment, if you want to read the details. Madoff’s firm, Bernard L. Madoff Investments, ran more than two dozen funds for decades, overseeing $17 billion and promising high returns and low fees. But a few days ago, Madoff blew the whistle on himself, telling senior executives at his firm and the FBI, according to the indictment, that it was all one big lie, a giant Ponzi scheme. He was broke.

But what pushes this beyond a juicy Wall Street rip-off story is the sheer size of the swindle — possibly the largest fraud in Wall Street history — and its implications for other hedge funds and investors.

From the New York Times:

“We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, director of the enforcement division at the Securities and Exchange Commission. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors.”

Andrew M. Calamari, an associate director for enforcement in the S.E.C.’s regional office in New York, said the case involved “a stunning fraud that appears to be of epic proportions.”

Those proportions have some concerned about how this will play out, beyond Madoff’s personal saga, according to The Times:

There was some worry on Wall Street that Mr. Madoff’s fall would shake more foundations than his own.

Calculated Risk supposes Madoff had about 10 to 25 hedge funds as clients, that they lost everything, and that some hedge funds will be taking some serious write downs soon.

Looks like Wall Street will be sorting through the wreckage of all this today, to see how much damage has been done. As if there weren’t enough to worry about, already.