Bill Singer Resigns from FIA -- for the time being.

July 17, 2007

On July 17, 2007 the following comment was posted on the Financial Industry Association (FIA) Blog:

7/17/2007 9:11:09 AM

A month and a half after numerous people on this site agreed with Bill Singer in that we need to pay dues to have a real voice like a REAL union and nothing has happened.

Looks like this merger will go through with nothing more than grumbling from us as we bend over and take it.

So disappointing the best we could do is act like whiney babies, say stupid comments on this site and do NOTHING!

Sadly, in response to that post, another Blog entry appeared that same day:

7/17/2007 12:44:34 PM

To the schmuck who posted this.....why don't you stop crying and send in a donation of $1000? Or better yet , why don't you do the world a favor and fall on a knife!

Let me briefly clarify what underlies the above posts (and I did not send in the first cited post nor do I know who did).

The Financial Industry Association (FIA) is a coalition of independent and regional NASD member firms that was founded by John Busacca and Richard Goble from their offices at North American Clearing in Florida. When word got out that John and Richard were planning to contest NASD District and Board elections, I approached them about merging the firms from the NASD Dissident movement (which I worked with)into their "reform" movement. During the past two years that coalition resulted in historic, upset victories at the NASD District Committees, National Adjudicatory Council, and Board levels. I agreed to serve as a pro bono Legal Counsel to FIA, and have enjoyed that role these past two years.

Several months ago, FIA was the lone voice advocating against the proposed merger of NASD and NYSE. The essential points behind that effort to derail the merger were 1. the loss of the one-firm-one-vote franchise historically enjoyed by all NASD member firms (regardless of size); 2. the desire to submit the proposed merger to a comprehensive debate among the members and with the regulator; and 3.the belief that this proposed consolidation presented the perfect opportunity to extract meaningful reforms from what many deem to be a bloated, ineffective SRO bureaucracy.

Notwithstanding the dramatic election victories, FIA was unable to translate its past success into a successful petition campaign against the NYSE/NASD merger. While hope still remains that the courts, Congress, or the SEC may still halt the rush to SRO consolidation, the simple fact is inescapable: The NASD membership voted and approved the merger. I think that was the wrong decision, but I am prepared to accept the result and work towards implementing reforms. Similarly, I am prepared to continue to oppose the merger through whatever legal process is available.

In order for the independent/regional NASD member community to have a credible voice at the table, I have spent the past several months urging FIA to transform itself from a loose-knit affiliation of dissident and reform factions into a formal, dues-paying trade group. I envisaged districts membership where FIA members would work on their local problems and interface with NASD Staff -- and a central, national headquarters where FIA would coordinate all national initiatives. I also want to see a robust and democratic nomination process for FIA's Board, executives, and all elective officers. For FIA to work, it must invite all interested industry members to its table and facilitate their ability to contribute.

Clearly, John and Richard are very busy with running their business (North American Clearing) and providing the unending volunteer work required to operate FIA. I have offered to play a larger managerial role and have made numerous constructive proposals towards moving FIA into a more formal trade group. Unfortunately, I just can't get traction and FIA does not presently seem ready to undergo the transformation to something larger.

Finally, the FIA Blog (as noted in the excerpts above) is a continuing source of embarrassment. Free speech is a wonderful thing. I respect it and detest censorship. Nonetheless, it is imperative for any organization to promptly and meaningfully monitor its website to ensure that its image is not trashed by troublemakers. That is often accomplished through the use of software filters that prevent obscene postings from appearing on a website. Moreover, it is also important for Blog masters to be vigilent when posters go beyond the pale --- in the past, FIA posted messages that purportedly wished that an NASD executive get cancer, and other inappropriate postings. Those messages were NOT posted by FIA. Those messages were removed when they became known. Nonetheless, such nonsense diverts us all from the serious work ahead and speaks poorly of our professionalism and dedication to reform.

The troublemakers who haunt all websites and blogs are legion. We will never be able to rid ourselves of such stupidity. But you have to make the effort. And when postings such as the one above -- wishing that someone fall on a knife -- see the light of day, that's a failure. I expect far more of FIA than to allow such trash on its site. I expect a better policing effort than to have such crap on a Blog for hours (much less for days). I hope that such garbage will quickly disappear from FIA's Blog once this commentary is publicized.

In keeping with all of the above, I have recently decided to resign my formal position as Counsel to FIA and to simply remain affiliated with the organization in my personal capacity for the time being. If FIA is ready to formalize its membership and become the trade group that so many in the NASD community seek, then I will once again be happy to take on whatever role is necessary to see the vision realized.

For now, I wish John and Richard the very best and sincerely thank them for the amazing contribution they have made to our industry.

Bill Singer