Open Letter to FINRA: The Last Tango?

March 5, 2009

Readers of this blog write to me with ideas about how to improve Wall Street's regulation and with complaints about its failures.  The voices of the independent and regional FINRA community -- both owners and registered persons -- express frustration with inept rulemaking, ineffective regulation, and the perception that regulation has long been biased in favor of the larger firms and high-profile players who brought much of the present economic devastation upon our heads. I am flattered to read my mail when it says that I am viewed as a credible advocate for regulatory reforms to protect both the public and the industry.  Sadly, it pains me to explain to such folks that I am disheartened by years of dealing with regulators and trade groups who chose to play organizational politics at the expense of investors and industry participants.  There is an untapped reservoir of talent among the ranks of FINRA's member firms and registered persons, and it's time that we opened the spigot and took advantage of their ideas and expertise.


One last time, and in response to popular demand, I am reaching out to the powers that be at FINRA.  I submit for your consideration the verbatim version of the email that I sent to FINRA on March 5, 2009.  I will advise you of any reply.








TO: Nancy Condon



Richard Ketchum

Stephen Luparello

Cameron Funkhouser


DATE: March 5, 2009


Dear Nancy:


I write to you solely in my personal capacity and with the hope that you will direct this correspondence to the individuals noted.


In 1998, I was one of the first four candidates to force a contested election for the NASD Board.  In the ensuing years, I founded and counseled what the press often refers to as the FINRA (formerly NASD) Dissident Movement.  Others have nurtured a separate coalition that is frequently referred to as the FINRA Reform Movement. Given that those two factions often make common cause, my preference is to refer to the "Dissident/Reform" Movement.


The true vision of self-regulation cannot exist in an atmosphere of isolation and intimidation - be that real or perceived. Today, many FINRA member firms and registered persons believe that any public criticism of FINRA elicits regulatory retaliation.  Thus, the perception is that dialog is discouraged, if not threatened.


FINRA refuses to engage in meaningful dialog with the Dissident/Reform Movement.  The closed lines of communication radicalize industry opposition by marginalizing the voices of moderation. The persistent strained relationship undermines FINRA's credibility and effectiveness by inhibiting the industry's full cooperation and confidence.


The Dissident/Reform Movement seeks a confidential meeting with FINRA senior management and appropriate representatives of FINRA's Board.  It is time to rebuild the consensus within the FINRA community and to restore the partnership between the regulator and the regulated. Can we take this historic step towards restoring the consensus that makes for more effective regulation?




Bill Singer

Registered Rep logo

Gadfly to FINRA: "Better," "Fairer" Regulation Please

Mar 6, 2009 1:12 PM, By David A. Geracioti

We really don't want to take sides, but we can't help but notice that our long-time legal columnist Bill Singer is throwing down the gauntlet again. He's challenging FINRA-for a meeting. You see, Bill Singer has a history of, as he says, "driving regulators crazy, from the NASD to FINRA and the SEC." In the 1990s, he founded the NASD Dissident Movement and became one of the first four candidates in that SRO's history to challenge its slate of Board candidates. Since then, he frequently joins forces with those who prefer the title of NASD (now FINRA) Reformers, and together the FINRA Dissident/Reform Movement has lobbied for what it calls "more cogent rulemaking and more effective regulation." (This is not imply that every regional/indie brokerage agrees with Singer and his Dissident/Reform Movement.) ...