Bill Singer On New FINRA CEO Robert Cook

June 15, 2016

The Financial Industry Regulatory Authority ("FINRA") announced that it will be splitting the roles of Chair/Chief Executive Officer Richard Ketchum, and, in furtherance of that policy, has named Robert W. Cook as its new CEO. "FINRA Announces CEO Transition" (Press Release, June 13, 2016). FINRA CEO Cook's background is presented in FINRA's Press Release:

About Robert Cook
Robert W. Cook most recently served as a partner in Cleary Gottlieb's Washington, DC, office, which he joined in June 2013. There, Mr. Cook focused on the regulation of securities markets and market intermediaries, including broker-dealers, exchanges, alternative trading systems and clearing agencies. Robert served as the Director of the Division of Trading and Markets of the U.S. Securities and Exchange Commission from 2010 to 2013. Under his direction, the Division's 250 professionals were responsible for regulatory policy and oversight with respect to broker-dealers, securities exchanges and markets, clearing agencies and FINRA. In addition, the Division reviewed and acted on over 2,000 rule filings and new product listings each year from self-regulatory organizations, including the securities exchanges and FINRA; and was responsible for implementing more than 30 major rulemakings and studies generated by the Dodd-Frank and JOBS Acts. Prior to joining the SEC, Mr. Cook served as a partner at Cleary Gottlieb since 2001, and joined the firm in 1992. During his years of private practice, Mr. Cook worked extensively on broker-dealer regulatory matters, advising large and small firms on a wide range of compliance questions. Mr. Cook graduated magna cum laude with an A.B. in Social Studies in 1988 from Harvard College, where he was elected to Phi Beta Kappa. He received his Master of Science with distinction in Industrial Relations and Personnel Management from the London School of Economics in 1989. Mr. Cook received his J.D. cum laude from Harvard Law School in 1992.

I have received numerous queries from the press and industry as to my position on Cook's appointment, to which I offer the following response:

During the often contentious years following both the Securities and Exchange Commission's and the United States Department of Justice's landmark 1998 cases against NASDAQ/NASD, I frequently butted heads with NASD's and then FINRA's powers that be. As an unapologetic industry dissident and reform advocate, I had the distinction but not always the pleasure of working with those in charge of the self-regulatory organization.

After I entered the private practice of law in 1989, my first encounters with NASD's senior management was working with Frank Zarb as we attempted to deal with the contentious relationship between his organization and the dissident/reform movements. Although I found Frank to be the consummate gentleman and Street-savvy, it must be said that we agreed to disagree on the best direction for NASD/FINRA. The thing with Frank was that there was always civil discourse and a sense that we were, at the least, listening to each other even if we remained intransigent. As to Frank's immediate successor Robert Glauber, I never liked him and the feeling was mutual.  Whatever tensions were contained during the Zarb regime broke out into full-fledged internecine warfare during the Glauber era.

At some point, Frank arranged for a meeting among me, Mary Schapiro, and Rick Ketchum. To this day, I can still see that conference room in Washington, D.C. with Mary Schapiro sitting at the conference table and attempting to engage me but with Rick Ketchum sitting in a chair in the corner, clearly not wanting to participate, and doing whatever he could to avoid eye contact or join in the conversation.

I remain steadfast and unequivocal in my admiration of the considerable professional accomplishments of Mary Schapiro and for her uncanny (and at times frustratingly so) ability to becalm troubled waters. But for her guiding hand at FINRA and the Securities and Exchange Commission, I am not certain that either regulator would have survived the Great Recession, which struck me as unfortunate because I am an opponent of self-regulation, I believe that FINRA should be de-certified as a self-regulatory organization, and I am convinced that the construct of a "commission" as the federal securities industry regulator is flawed beyond repair and needs to be junked. As with Frank, I rarely agreed with Mary on matters of regulatory substance but we somehow managed to maintain what I would consider a relatively cordial relationship over the years punctuated by periods of not-so-cordial. She may feel differently, so simply take my observation as the possible delusion of one of her frequent adversaries.

I am confident that departing FINRA CEO/Chair Ketchum and I share little affection or respect for each other, and I am satisfied to allow things to remain in that fashion. He has had an impressive regulatory career and retires with many singing his praises. May he enjoy his retirement but may we also move on from his legacy.  

All of which brings me to Robert Cook. I hope to meet with him and personally share my three decades of industry observations and ideas. By way of background, I entered the industry in 1983 with Smith Barney, Harris Upham & Co. and did two stints as a regulatory lawyer with both the American Stock Exchange and the NASD (which is now FINRA). After service as a regulator, I was Associate General Counsel at Integrated Resources Asset Management and also held a Series 7 and a Series 63. Since 1989, I have been in the private practice of law, mainly as a law firm partner but presently as an Of Counsel. In looking back over my career, I was among the founders of what was known as the NASD and then the FINRA Dissident Movement or Reform Movement. I persist in being an unabashed advocate for small and mid-sized brokerage firms and public investors, and for the rights of individual registered representatives and associated persons. See Bill Singer's online resume.

If given the opportunity to meet with new FINRA CEO Cook, I will reiterate my frustration with FINRA's efforts to socially engineer its smaller firms out of business. I will raise my ardent belief that the disenfranchisement of hundreds of thousands of registered men and women must end and that it is an injustice for FINRA to deny any and all voting rights to the rank-and-file participants of its community. Similarly, I will protest "mandatory" arbitration for public customers and for industry participants.  Also, I will press for more dispersion of investigations and enforcement to the district level and warn against the ossification of self-regulation when it becomes a Washington, DC entrenched bureaucracy. Finally, I will offer to serve in any capacity by which I might best advance the reform agenda and by which I might advocate for those who are now voiceless at the self-regulator. READ: "Wall Street Critic Bill Singer Revisits His 2009 Reform Proposals" ( BlogApril 22, 2016).

In that spirit, I wish Cook the best and look forward to working with him rather than against him. I welcome his leadership at FINRA without pre-judgment and remain ready, willing, and able to serve as a partner in self-regulation.

Bill Singer, publisher of the Blog