Gadfly to FINRA: “Better,” “Fairer” Regulation Please
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We really don’t want to play devil’s advocate, but we can’t help but notice that our long-time legal columnist Bill Singer is throwing down the gauntlet again. He’s challenging FINRA—for a meeting. You see, Bill Singer has a history of, as he says, “driving regulators crazy, from the NASD to FINRA and the SEC.” In the 1990s, he founded the NASD Dissident Movement and became one of the first four candidates in that SRO’s history to challenge its slate of Board candidates. Since then, he frequently joins forces with those who prefer the title of NASD (now FINRA) Reformers, and together the FINRA Dissident/Reform Movement has lobbied for what it calls “more cogent rulemaking and more effective regulation.” (This is not imply that every regional/indie brokerage agrees with Singer and his Dissident/Reform Movement.)
In our pages every month for more than seven years, Singer has criticized what he sees as a double standard in regulatory action when it comes to rule-making for independent/regional firms. He thinks—and has openly argues from his website, rrbdlaw.com, and his blog, brokeandbroker.com—that too often it’s the big securities firms who get all the breaks and the small(er) firms get biased treatment from regulators. FINRA has not yet replied to our email seeking comment. But in the past, FINRA (and its precursor, NASD) has denied any unfair bias toward small/regional/independent firms. The SRO has stated that regulators are agnostic about the size or business model of any individual member firm.
So, Singer has sent an open letter to FINRA press officer Nancy Condon requesting a meeting with new FINRA boss Richard Ketchum and members of his staff. In his letter, dated yesterday and posted here, Singer says, “The Dissident/Reform Movement seeks a confidential meeting with FINRA senior management and appropriate representatives of FINRA’s Board. It is time to rebuild the consensus within the FINRA community and to restore the partnership between the regulator and the regulated. Can we take this historic step towards restoring the consensus that makes for more effective regulation?”
Singer, an active member of RegisteredRep.com’s advisor forum, has also posted his letter there, and is already getting kudos from other forum dwellers. For past alleged sins of NASD/FINRA, see these Street Legal columns in Registered Rep. magazine by Singer:
A Call For Overhaul
A Suspicious Case From FINRA
The Smaller They Are, The Harder They Fall
Have Levitt’s Words Come Back To Haunt Him?
Singer emailed me that “I have been a tireless advocate for effective and fair regulation of the indie/regional brokerage community. I have enjoyed close, personal relations with some of NASD/FINRA’s most senior management, but have also crossed swords with them.”
For more on the Dissident Movement, see this story that appeared in Registered Rep. magazine in February 2006. (The Movement took something of a black eye last year when one of the vocal members of the group, Richard Goble, was hit with a civil fraud charge. The SEC froze the assets of his firm, North American Clearing. See this RegisteredRep.com story from last year.)
Singer also went on to say that, “As a former NASD Regional Attorney and a nearly three-decade veteran of Wall Street, it’s hard for the regulatory community to snow me and they also know that I have Street smarts and enjoy close relationships with many former regulatory colleagues and by virtue of frequently being sought by former regulatory employees for their employment lawsuits against NASD and FINRA. I have no tolerance for the clowns in our industry who advocate an end to regulation or the misguided whose knee-jerk reflex is to brand all regulators as fools and idiots—we have more than enough such miscreants to populate both side of the regulator/regulated table (and too many of them find seats of power). Partially from my role as a leading regulatory lawyer but also in reaction to my published columns in Registered Rep. magazine and on my RRBDLaw.com website and BrokeAndBroker.com blog, I receive a great deal of phone calls and emails from overwhelmed B/D owners and their registered staff. Lately, the incoming communications have been heartwrenching and I find myself pushed to do more to help our industry dig its way of the morass. In the past, I have often been in the forefront of many high-profile clashes with regulators over the mergers that created FINRA, over inept regulation and unfair regulators, and as a voice for substantive reform of our failed regulatory system. In recent days I have concluded that I can no longer remain on the sidelines and must once again try to forge a coalition to restore the lost partnership between regulator and regulated. Unfortunately, I harbor little expectation and even fewer illusions. In addition to taking on the regulators I often find myself at odds with industry trade groups that think their role is to acquiesce rather than advocate. Sadly, the Dissident/Reform Movement has been sidetracked by industry politics just as often as it has been set back by folks within its own ranks who seem to place personal advancement before the interests of our industry. Nonetheless, I am giving it one more try.”
