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SIPA supports David Sobel for NAC

Recently the SIPA has taken the summer off to take care of housecleaning, server and member updates as well as tackle the possibility of creating an SRO. We were however busy contemplating the FINRA nomination of David Sobel to the National Adjudicatory Council (NAC) for a 3 year term and after careful consideration we have decided to support him. This marks only the second time ever we have supported a FINRA nominated candidate however in this case we believe a solid choice was made by the “hand picked nominating committees”.

Yes, we just said the hand picked nominating committees and I already dread my e-mail and phone calls in the morning whereby everyone denies what we all know is true, however if you look at the past nominees for the FINRA board as well as the NAC, they inevitably all arrive out of service on the Small Firm Advisory Board (SFAB). There is an unwritten rule in which once you are selected to serve on the SFAB you ascend into the position of Chair of the SFAB and then are nominated to be the small firm FINRA nominee to the Board of Governors or NAC. For some reason the members in this group get very uncomfortable when I talk about this sort of structure being in place, instead of just embracing the politics of it and accepting it. Years ago I was on the Board of Governors for the Florida Securities Dealers Association (FSDA) and was named Convention Chair for the year. Due to a busy schedule I was forced to resign but not before an incredulous Director informed me that if I stayed I would be named Treasurer next year , Vice President the next and would be the President of the FSDA in only thee years. I graciously declined but you can see how this and other organizations work.

This year the nominating committee, which incredibly decided not to nominate a Board seat but delved back into the nominating business for NAC, has selected David Sobel as its nominee. So much for letting transparency and political will decide the day like they announced before the small firm board election. Hard as this may be to say, we have decided to support Sobel’s nomination and would encourage all of you to closely look at his record and his actions over the last few years and decide for yourself if he would not make a great addition to NAC. For starters he is a lawyer and while there are probably 1000 jokes I can make about that, I think it might be high time we had a law expert on the small firm side analyzing actions by FINRA and its members. On the NAC, disciplinary cases will be reviewed and decided and hopefully he will use this vast knowledge of the law to tell the panel when something stinks or when something is not legal. Currently FINRA wins approximately 90% of its disciplinary cases and NAC reviews and reaffirms these decisions at approximately the same rate. This sounds like some sort of Tom Cruise movie from the 1980’s because it’s almost impossible to win 90% of the time in anything and everyone at the SIPA would urge David to do the right thing and take a closer look at these cases and explain how in the world the winning percent can be so high? The only other person who had a 90% winning streak was Bernie Madoff so its time to take a closer look and seriously ask if the hearing officer and committee members are rubber stamping any and all charges brought before them or are they seriously taking a close look at all facts.

Another reason we are supporting Sobel is that he is a man of his word and so are we. In 2009 Stephen Kohn and David Sobel were locked in a battle to contest the FINRA nominee for the open NAC seat and we decided to intervene so as to not split the contested dissident vote. After many conversations, David decided it was best for the small firm movement to step aside, support Stephen Kohn and not dilute the small firm vote and Kohn won in a landslide. Kohn also vowed to support David in future elections should he step aside. We vowed we would support him the next time he ran and here we are two years later giving him support. For some reason the SFAB and the Nominating committees have a hard time admitting what we just did but at least you can never say we are not honest. We are supporting David and we expect to see results, not just an election and more of the same 90% ratio of victories against the small firm.

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September 23rd, 2011


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