STEPHEN A. KOHN Wins Three-Way Race for 2017 FINRA Small Firm Governor

August 22, 2017


On August 22, 2017, the Financial Industry Regulatory Authority ("FINRA") announced that Stephen A. Kohn, President and CEO of Stephen A. Kohn & Associates, Ltd. was elected as the 2017 FINRA Small Firm Governor. Stephen A. Kohn has demonstrated a persistent and consistent record as an unabashed advocate for industry reform and effective regulation. Stephen sought election as the 2017 FINRA Small Firm Governor in order to make sure that someone fights for the legitimate needs of FINRA's besieged small firms. Time and time again, Stephen steps forward when others hang back. Time and time again, Stephen speaks up when others remain silent. 

As a founder of the NASD and FINRA Dissident Movement(See, "THE MARKETS; Two Independents Are Elected To Serve on N.A.S.D.'s Board" (New York Times, December 22, 1998)and a 35-year industry veteran, I have tired of candidates for FINRA elective office who talk the talk but won't walk the walk. I know that following his election as the 2017 FINRA Small Firm Governor, Stephen Kohn will advance the cause of industry reform and remain a passionate voice in raising the legitimate grievances of the small firm community.

Many folks struggle to understand why I advocate for "fairness" when it comes to sanctioning weaker and more vulnerable industry respondents. In order to understand where I'm coming from, keep in mind that I am a former industry regulator and a former Hearing Officer for the City of New York. Also, I am a former in-house industry lawyer and a former Series 7/63 registered rep. Another factor that prompts my advocacy is that I was the third generation of my family in the wine and liquor industry before becoming a lawyer -- there is hardly a more regulated business than the one I came from! I have represented the industry in private practice. I have represented public customers in private practice. I have represented witnesses before Congress and have represented industry whistleblowers. In a sense, I have sat at all sides of the table. I have felt the pain and wielded the power. That gives me a very unique perspective.

Consequently, I am convinced that it matters, it matters a great deal, that regulation be a partnership between the regulated and the regulator. It is equally important that we recognize the difference between, on the one hand, unrepentant miscreants who delight in violating the rules and feel no remorse when harming their victims, and, on the other hand, men and women who are inherently decent folks but who violate (sometimes inadvertently and sometimes foolishly) the rules and regulations of the industry. We don't need to excuse their mistakes. We simply need to place things in perspective and bring our humanity to work in order to ensure that the punishment fits the crime.

I took up the cause of Richard S. Botkin following my review of his FINRA AWC settlement.  It appears that he deserved to be sanctioned for his misconduct. Botkin did not deserve, however, to be fined $15,000 and suspended for four months. Said sanctions are excessive and unwarranted and should be reduced to fairer dimensions. I speak for Richard Botkin because no one else seemed to care. The lack of response from many of the good folks in the industry and in regulation who I contacted to right this wrong was disheartening. That is, until Stephen Kohn stepped up and got involved.  Don Quixote and Sancho Panza reincarnated! Stephen Kohn joined with me in seeking redress of FINRA's unfair fine and excessive term of suspension of Marine Corps veteran Richard Botkin, read: "Grassroots Movement To Revise FINRA Fine And Suspension Of Richard Botkin" ( Blog, July 25, 2017). Stephen took the initiative and contacted FINRA to urge reconsideration of Botkin's sanctions. 

I want to express my deep sense of appreciation to the thousands of Blog readers who supported Stephen's candidacy, and my profound gratitude to the many military veterans and small firm members who did what they could to get out the vote for Stephen. It is with great pride that I announce that Stephen Kohn will take his place as one of the three Small Firm Governors on FINRA's Board. I have no question that he will stay the course and remain an intelligent yet passionate voice for industry reform and fairness.  It was my distinct personal and professional privilege to support such a wonderful candidate.

Give 'em hell Stephen!