The Blog Of The Securities Industry Professional Association


FINRA has announced today the following:

Dear Executive Representative:

At its recent meeting, the Nominating and Governance Committee of the FINRA Board of Governors decided it would not nominate a candidate for the one open small firm seat up for election in 2011. Instead, any eligible candidates who obtain the requisite number of petitions will be included on the ballot.  By doing so, the Committee is hoping to create a less negative election environment for small firms. 

You will receive more information about the upcoming election, including the petition process for inclusion on the ballot, in an Election Notice that we will issue in April.

Marcia Asquith
Senior Vice President and Corporate Secretary

The SIPA applauds this move, however isn’t this wording sort of like the left wing media associating the shootings in Tuscon last month with Conservative radio?  Why is FINRA deciding what a “negative election environment” is?  The reason the elections had a negative tone is that members didn’t have a say in their own SRO and 1500 small firms have disappeared in the last 4 years.  Negative campaigns can be a necessary evil at every level of office.  The nominating committees were often picking candidates for important boards without knowing if they carried the same views as the members.  The Small Firm Advisory Board became a springboard for nomination to the Board of Governors.  It became the all male club we often see in movies and there was an implied sense of entitlement that if you were appointed to the SFAB and served your time you would be next in line to be sent to the big board.  Interestingly, In October of 2009 after the SIPA helped get Stephen Kohn elected to the National Adjudicatory Council I was contacted by a prominent FINRA king maker who told me that it has already been decided who would be the 2010 Board of Governor nominee and he told them at the time it would never fly. The nominating Committees come out with statements every year claiming that it was an open and fair selection process but come on, Iran states the same thing with their elections. Read our story from fall of 2009 again and ask yourself how I could have known this?  Click here to read that story

Years ago I was asked by a prominent NASD/FINRA leader to “stop running elections” and my rely was simple:  Stop anointing board positions and allow the members to decide for themselves who should represent them. We believe that this move by FINRA was most likely prompted by the fact that typically the nominating committee will renominate a new board member for another term without much hesitation.  However the person holding this seat is Ken Norsberg whom the SIPA supported and helped get elected.  We wonder if this sudden change by the nominating committee will revert back to the old process once this election cycle ends or if this will be a complete change.  Change comes in small steps and we give credit to the nominating committee for making the election process a fair one.  We have already received notice from several SIPA members of their intent to run for the seat and we encourage as many as possible to run.  We believe a dozen candidates running would allow for free discussion on various regulatory issues while at the same time let voters see the contrast and different opinions of each candidate.  Last year I had the pleasure of being the moderator for a debate between 5 candidates running for the board seat.  despite some obvious hand wringing from some candidates, I think all of us agreed that it was a fair, impartial and informative debate.  Differences existed between them but there was also a lot of common ground and even yours truly came away with a respect for some non SIPA candidates.

We hope that FINRA’s attempt in all this is to allow a truly fair and open system rather then trying to dilute the vote among small firm candidates while counting on their pet trade organizations to support a single candidate of their choosing.  Even if that’s the case it will still be the voice of the small firm and this is what we have been fighting for.  The SIPA intends to sit this election out and allow the members to decide for themselves who should speak for them.  We will of course call things like we see it and will be blunt in our assessment of candidates however we will post statements by any potential candidate for all of you to view upon request.

May the best candidate win!

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February 11th, 2011


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