It is inevitable that organizations set up to act as watchdogs will be subverted into protectors from oversight by the regulated community, but this one may set a record for speed, cluelessness, and chutzpah. As Shakespeare said in “Measure for Measure,”
We must not make a scarecrow of the law,
Setting it up to fear the birds of prey,
And let it keep one shape, till custom make it 455
Their perch and not their terror.
A candidate for the Financial Industry Regulatory Authority Inc.’s board of governors has launched what he calls a “dissident campaign,” asserting he will try to prevent the regulator from “antagonizing” members, especially independent broker-dealers.
Brian Kovack, president and co-founder of Kovack Securities Inc., obtained enough signatures on a petition to launch a campaign for the board seat allotted to a mid-size firm. He will run against John Muschalek, vice chairman of First Southwest Co., who was selected by the Finra nominating committee.
“I would like to actively challenge Finra in certain areas,” Mr. Kovack said. “I’d like to see some reform and make the organization more effective without unnecessarily antagonizing member firms who are trying to do the right thing for their clients.”
The election will take place at the July 30 Finra board meeting in Washington. Other seats up for election include one for small firms and one for large firms.
If elected, one of Mr. Kovack’s targets would be Finra’s arbitration system.
“It needs a better structure of accountability for lawyers who file frivolous claims,” he said.