Bill Singer's Statement on FINRA Board of Governors Upset Elections

August 20, 2019

PERSONAL STATEMENT by BILL SINGER, 
Publisher of the 
BrokeAndBroker.com Blog and Securities Industry Commentator:

FINRA Small Member Firm Petition Candidate Linde Murphy defeated FINRA incumbent Small Member Firm Governor and FINRA Nominating Committee candidate Robert Muh. Additionally, Large Member Firm Petition Candidate Christopher Flint from FINRA member firm ProEquities, Inc. defeated incumbent Large Member Firm Governor and FINRA Nominating Committee candidate Andrew Duff of FINRA Member Firm Piper Jaffray & Co. See: "FINRA Announces Governor Elections and Appointment" (FINRA News Release).
http://www.finra.org/newsroom/2019/finra-announces-governor-elections-and-appointments 
These outcomes constitute stunning rebuffs of FINRA's Nominating Committee and underscore the serious rifts that exist and are growing between FINRA's powers-that-be and its membership.

I have known defeated incumbent FINRA Small Firm Member Governor Robert Muh for over a decade and energetically supported his petition candidacy in 2016, when he narrowly won election amid a crowded field of petition candidates; see, for example, "Support ROBERT MUH For FINRA Small Firm Governor" (BrokeAndBroker.com Blog, July 5, 2016) 
http://www.brokeandbroker.com/3179/robert-muh-finra/

Bob is a long-time industry veteran and an articulate spokesman for industry reform and the legitimate needs of the FINRA Small Firm Community. As such, I fully supported Bob's re-election through much of July 2019; see, for example, "Securities Industry Commentator " (July 22, 2019)  http://www.rrbdlaw.com/4704/securities-industry-commentator/   

On July 26, 2019, I painfully withdrew my support for Bob's candidacy after FINRA's Nominating Committee transmitted a letter dated July 25, 2019, in support of his candidacy; see, "UPDATE: 2019 FINRA Contested Small Firm Election: Vote For Linde Murphy (BrokeAndBroker.com Blog / July 26, 2019). 
http://www.brokeandbroker.com/4713/2019-finra-board/,

When Bob sought re-election this year, I had expected and urged him to pursue the petition route by which he won his seat in 2016. Although that somewhat arduous process required him to campaign for 3% of the Small Firm's community's vote, I was confident that he would easily obtain that threshold. I would have done everything possible to secure the qualifying petition votes on his behalf. For reasons that I believe Bob felt were right, he declined to run via petition and accepted FINRA's Nominating Committee's nomination. I urged Bob to decline that nomination but was willing to hold my nose because he is a sincere and fair-minded industry veteran. 

If FINRA's Nominating Committee had just stayed on the sidelines as it recently has, I have no doubt that Governor Muh would have been decisively re-elected. Stupidly, the Committee published an unnecessary communication (first on July 25th and another in early August) expressing its support for Muh. Those who have counseled FINRA down the path of confrontation with its Small Firm community, continue to exercise inappropriate influence over the regulator. Truly, I thought we were all moving in a better, more constructive direction. I was wrong. FINRA just doesn't seem to miss an opportunity to miss an opportunity.  

I was outraged when the Nominating Committee interfered in the contested election by sending out its July 25th communication supporting Bob. First, I thought that Petition Candidate Linde Murphy was a superb adversary and was a credible candidate for the beleaguered FINRA Small Firm community. Second, since I was one of the founders of the FINRA Dissident Movement, I felt ethically challenged by endorsing any candidate who appeared hand-picked by FINRA. Third, the FINRA Nominating Committee lacks ANY representation by ANY Small Firm Governor, and the three industry participants on that Committee who signed the communication in support of Muh's candidacy (and, as such, against Murphy's), had themselves been appointed or nominated by that same committee. Those circumstances forced me to rupture my relationship with Bob and throw my full support behind Linde Murphy. Despite all of that, I still consider Bob a wonderful individual and an articulate voice for industry reform. He deserved a second term. He was deprived of that victory because of FINRA's epic blunder. I will never forgive FINRA for forcing me to choose between friendship and integrity.

Ultimately, FINRA has yet again interfered in the affairs of its Small Firms in a manner that was heavy-handed, inept, ineffective, and evidencing a woeful misunderstanding of the smaller firms' mistrust of the regulator and its patrons. Despite so many efforts by the current administration at FINRA, those at the helm demonstrated a disheartening grasp of the regulator's political landscape. Yet again, the Dissident community felt betrayed and the detritus from FINRA's foolish foray into the organization's small-firm politics has devolved the healing between the regulator and the regulated back to the trenches.

I have reached out to FINRA and once again offered my services as an intermediary and conduit to and from the Small Firm community. I have no expectation of any positive response beyond a few errant meetings. More likely, FINRA's spin doctors will press a media campaign to minimize the implication of Muh's loss as an incumbent Small Firm Governor. If I take solace in anything, it is that the Small Firm community will be represented by three champions in Governors Stephen Kohn, Paige Pierce, and Linde Murphy. I will make my services available to them and their constituents, as I did during their petition campaigns.  

Bill Singer


PERSONAL STATEMENT by BILL SINGER: Upset FINRA Board of Governors Election.

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