Does FINRA have the integrity to do the right thing?

May 29, 2008

Many of you have telephoned and emailed me the last few days about the reported SEC action against Richard Goble, who now serves as a small-firm Governor on FINRA's Board. See this recent blog posting for further details:  Pointedly, you raise concerns about whether FINRA will force Goble to resign (or that he will do so voluntarily), and whether the regulator will use that opportunity to seat another of its cronies.

Richard Goble was elected in 2007 to serve as a small-firm Governor.  He was not nominated by FINRA's National Nominating Committee.  To the contrary, he headed up a ticket populated with Dissident and Reform contested candidates, including folks running at the district and National Adjudicatory Council levels.  That ticket tapped into a wellspring of anger and support, generating winning margins for Goble and other contested candidates.

If Goble is to be replaced, then the only fair option for FINRA is to call for an immediate election to replace him (thereby giving the membership a chance to seat someone with a popular mandate), or FINRA must appoint another individual with prominent Dissident or Reform credentials and who enjoys the support of that community.  As a founder of the Dissident movement and a long-time counselor to that and the Reform movement, I believe I enjoy a unique perspective as to acceptable replacements for Goble's seat.  I would submit three names as acceptable (subject to their eligibility as affiliated with a FINRA small-firm). In alphabetical order:

  • John Busacca of the Securities Industry Professionals Association
  • Daniel W.Roberts of Roberts & Ryan Investments Inc.
  • Howard Spindel of Integrated Management Solutions LLC

For the record, I will not under any circumstances accept an offer to replace Goble.  

Without question, the only fair option for FINRA is to ensure the continued presence on its Board of a credible voice that speaks on behalf of the Dissident/Reform constitutency that elected Goble and his running mates.  Anything less than that would clearly underscore the allegations I and others have made for years that FINRA is more about power politics and marginalizing smaller firms, than it is about providing for the fair regulation of our industry. 

If I were a betting man, I know where I would place my bet.  Don't ask.  You're not going to like my answer.