June 5, 2017
Dinosaur in the Room
In this age of incredible technology, we are still dealing with a regulatory fossil. Despite all the efforts to revive an old, anachronistic system, we continue to be the victims of this outmoded "membership" pile of bones.
Recently, veteran industry dissident and reform advocate Bill Singer submitted a Comment to FINRA in response to a Special Notice. In his Comment, Bill proposed a blueprint for overhauling FINRA and restructuring it into three regulators for Small, Mid-Sized, and Large member firms, with each having its own rule book. "Bill Singer Submits Rare FINRA Comment" (BrokeAndBroker.com Blog, June 1, 2017).
What I am most taken with is the degree of analysis and mathematical footwork Bill has devoted to his proposal. Finally, someone has provided us with the numbers that show how unfair FINRA's gerrymandered Board is and how it is driving our small firms out of business.
Like Bill, I have complained about how all FINRA member firms are judged according to an unworkable one-size-fits-all standard. Also, we agree that the present Board is a dinosaur that needs to be relegated to the regulatory graveyard. Among my colleagues in the FINRA reform movement, we have often grumbled about the need to form a new self-regulatory organization. While the idea is enticing, the actual cost, which would be borne by those joining, could be prohibitive; and this is not something that we could accomplish overnight. On the other hand, Bill's proposal to restructure FINRA into three divisions would avoid much of the cost and delay of starting a new SRO and would breathe new life into the old bag of bones that is now FINRA. I love the idea of restructure and reinvent!
Perhaps Bill's proposal is not where it will all end up. But, in the very least, it presents a starting point. FINRA has the wherewithal, staff, and money to accomplish this goal from within. The Board should appoint a committee to determine the feasibility of the task. The committee should be comprised of members from the three classes of firms, in the same percentage as Bill calculated. Additionally, there should be some rank and file representation since the rules apply to all membership.
I have recently announced my candidacy for the 2017 FINRA Small Firm Governor seat. I was honored to receive Bill Singer's endorsement and the support of the BrokeAndBroker.com Blog. If elected I promise to do my very best to present the reasonable views, comments and complaints of my supporters and to never lose sight of the goal of enhancing FINRA's role as a regulator while ensuring that it acts fairly and in a manner that is truly representative of all its member firms. Those of you who know me and who have voted for me in the past know that I keep my word.
As with all small-business owners, I've been told that it can't be done, that I can't do it, and that I'm taking on powerful forces. If you don't love a challenge and won't rise to face it, then you shouldn't be running a small business to start with. It's about time that those who are running FINRA realize that it takes a special kind of person to start their own business and keep it alive. We don't scare easily. We don't run at the first whiff of gunshot. I hope that I can count on your support. I assure you that you can count on me.
Please contact me and let me know your thoughts and let's start working together to fix FINRA.
Stephen Kohn, Candidate for 2017 FINRA Small Firm Governor
Stephen A. Kohn & Associates, Ltd.
3232 South Vance Street, Suite 210
Lakewood, Colorado 80227
Stephen A. Kohn has been employed in the financial services industry since 1984. In 1996, he founded FINRA member firm, Stephen A, Kohn & Associates, Ltd. ("SAKL"), which he owns and operates in Lakewood, Colorado. SAKL is a small, Independent broker/dealer, catering to the needs of 28 independent representatives and their clients, with office locations in seven states, registered in thirty-seven.
Mr. Kohn holds Series 7, 24, 53, 63, 72, 73, 79 and 99 registrations. He has the distinction of having been elected twice to the National Adjudicatory Council ("NAC") in 2009 and 2014. Mr. Kohn also serves as an Industry Arbitrator and has been elected to the District 3 Committee.
Mr. Kohn graduated from C.W. Post College in 1964 with a BA degree. He has the distinction of having served in the U.S. Coast Guard Reserve.
Well known to those in the NASD and now FINRA small-firm community as a passionate and persistent advocate for small broker/dealers, who comprise 92% of FINRA membership, Mr. Kohn continues to speak out on behalf of his industry constituents and colleagues. He intends to remain active in the FINRA reform movement and urges all like-minded industry participants to reach out to him in full confidence concerning any and all matters.
NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.
A personal note from Bill Singer, BrokeAndBroker.com Blog:
Stephen A. Kohn is running as a candidate for the 2017 FINRA Small Firm Governor seat on the self-regulatory organization's Board. Stephen has demonstrated a persistent and consistent record as an unabashed advocate for industry reform and effective regulation. He is not running for office in order to burnish his resume. Without question, Stephen seeks a Board seat in order to shake things up, to force consideration of reforms that are long overdue, and to make sure that someone fights for the legitimate needs of FINRA's besieged small firms.
I support Stephen's candidacy for the 2017 FINRA Small Firm Governor and urge all BrokeAndBroker.com Blog readers to press their FINRA member firm's Executive Representative to support Stephen's candidacy for the Board.