The Blog Of The Securities Industry Professional Association




Dear Member Firm

We are at a historic crossroads in financial services regulation. In the last 3 years our industry has been marred extensively by ponzi schemes, fraudsters, and our own regulatory authority’s seeming inability to catch the bad guys.

Do you feel like we have lost the “self” in Self Regulatory Organization? As a small b/d owner, I am disheartened that my b/d is being treated in the same category as Madoff and Stanford, although I understand why. FINRA and the SEC both failed to protect public customers in the face of overwhelming evidence at both of those firms that something was seriously wrong. Why did this happen? Because there is not a level playing field applied to all FINRA member firms equally. As a former NASD Senior Examiner and currently a small b/d owner and compliance consultant, I have seen with my own eyes how some firms are treated with kid gloves, while others are assumed to be violating rules, even before such violations are proven. Back in the olden days at the NASD we called them “Tier 1”, “Tier 2” and “Tier 3”. If you were lucky enough to be “Tier 1” you would be given special consideration during an examination if problems were found. But I have also previously been told by a superior to prove somehow that a particular firm was under net capital, solely because the owner of the small firm had raised the ire of my supervisor. Is that a fair and level playing field? I don’t think so.

And what about the Wall Street Journal article on June 10, 2011 regarding Douglas Johnson, a former employee of NASDAQ who was able to insider trade under NASDAQ’s nose for several years? Do FINRA and NASDAQ apply the same standards to internal staff that are applied to those of us who are registered? Apparently not. Of course, NASDAQ is not owned by FINRA, but the same lax standards are being applied to our FINRA staff.

FINRA “small firms” (less than 150 registered individuals) will be voting on or about August 3, 2011 to vote for a new FINRA Board of Governors member to represent them for the next 3 years. Although “small firms” are roughly 80% of total FINRA members, we only have 15% representation on the board. Historically only about 10% of the members vote in the Board of Governors election.

I believe I am the best candidate to represent you on the Board of Governors. I have over 26 years of experience as a retail broker, NASD examiner, compliance consultant, and broker/dealer owner. I have depth and breadth of experience on both sides of the street and I have impeccable communication and team-building skills.

All of us in the “small firm” category need to hear your voice. It only takes a minute and this may be the most important Board of Governors election for several years to come. There are 2 steps:

1. Print, sign and date the attached Petition. This will include my name on the ballot for the election to occur on or about August 3, 2011. You are NOT agreeing to vote for me by signing my petition, you are only keeping your options open so that you will have more than one candidate to choose from during the election. If you are the Executive Representative of more than 1 firm, you can send a petition for EACH of your firms.

2. Watch your email on or about August 3 for an email indicating that it’s time to vote. The vote is handled online and takes less than 30 seconds. Even if you choose to support another candidate, please vote. This really is an important process in the self-regulatory framework.

Thank you for your time and response to this petition request. Please don’t hesitate to call or email me any time if you would like to discuss my views further.

Kind regards,


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June 10th, 2011




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