An irreverent Wall Street Blog
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:
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:About Robert CookRobert 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.
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" (BrokeAndBroker.com Blog, April 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 BrokeAndBroker.com Blog