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An irreverent Wall Street Blogby Bill Singer
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The Cheshire Cat of Wall Street
Written: June 27, 2008

As a much younger man in 1983, I started my career on Wall Street in the Legal Department of what was then known as Smith Barney, Harris Upham & Co.  From there I served stints at the American Stock Exchange, the NASD, Integrated Resources, and eventually pursued a career as a law partner whose practice focused on securities-industry regulatory matters.  It’s been a long career.  More than a quarter of a century.  I loved working on Wall Street.   It was exciting.  We raised money.  We invested in individuals and companies with ideas.  We made things happen, and, along the way, often changed lives for the better.  Not always.  Come on – if you’ve read my columns over the years you know I’m no hypocrite.  Wall Street has been plagued by more than a few crooks, but when we stumbled, we still managed to dust ourselves off and get back up.
Do I think the sky is falling and the end near? No.  As I often say: this too shall pass.  And it will.  Unfortunately, it’s not just whether storms pass.  They always do.  The more important question is what do they leave in their wake.  This time I see far more devastation than usual. 
Many of you have asked me in recent months what we on Wall Street can do to turn things around.  You have complained to me that the industry trade groups seem unwilling to enter the ring.  You say that those in power – the politicians and the regulators – seem only to have made things worse and now seem clueless. 
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The independent/regional brokerage community needs an effective trade group to formulate a gameplan for recovery. Those big firms who sucked the life out of local competitors and filled the pockets of politicians with campaign donations (and dominated the regulators) never lent the small bucks to the moms and pops of our country.  Sure, now go ask Bear Stearns to raise $2 million for that private placement for the small factory just outside of town. The font of local capital formation was always the independent/regional brokerage community.  As with the deceased Golden Goose, those who strangled it seem stunned that it no longer issues golden eggs.  Where are the dollars coming from to jump start the local business that employed the town folk who paid the county's taxes which footed the bill for the services we all need and rely upon?  Where the hell were the trade groups defending these smaller firms? Show me the trenches they dug on the battlefield.  Show me the lines that these groups drew in the sand and said "here but no farther."
The hundreds of thousands of registered men and women who sell the stocks and raise the dollars need an effective trade group to protect their rights and promote the professionalism of their chosen career.  They never had one and still don't. They have ideas.  They have experience.  No one seems to care.  They continue to be disenfranchised from any meaningful role in the process while their firms fail, their offices close, and they are kicked to the curb for corporate savings.
 In recent months,  I have spoken to every trade group that would take my call (sometimes it took many of those to get one response), and I even spoke to folks looking to start new trade groups.  Sadly, I could find no place to call home.  The disaster in our markets requires more than a once-a-year effort to field a slate of candidates to oppose those nominated by FINRA; and it requires the will to pushback when regulators are out of line.  Instead, I see only petitions, white papers,  masturbatory meetings, and more and more folks getting appointed to more and more useless committees and subcommittees.  For now, I am done with these trade groups and like a ronin in those Japanese samurai movies – belonging to no master – I will fight only the fights I believe in.
Politicians
In recent months, I have also spoken to far too many state and federal politicians, or, more accurately, to their gatekeepers who assure me in practiced lines that their boss takes my points seriously and would love to chat with me—in the future.  Then my email address or phone number mysteriously gets hit with tons of messages from folks looking to raise money for political campaigns.  Dejectedly, I watch the hearings where the chairs are filled with the same tired voices espousing the same failed solutions and answering the same regurgitated questions. Give 'em a show--that's about all we get for our two bits.  Yet more proof that the public always gets what it deserves.  We elected these incompetents, and we re-elect them. 
Regulators
And, yes, in recent months,  I have called and written to every regulator you could imagine.  Got back any number of polite replies.  Let’s do lunch.  Let’s have coffee. I starve and go thirsty.  Incredulously, I see new rules churned out daily beyond a beleaguered industry’s ability to absorb them.  You complain. They listen—but they do not process what you say.  It’s the same old game.  By appointment only.  The favored cronies get to whisper the same flattery in the same receptive ears.  Nothing changes.  But that those who regulate had some meaningful industry experience.   You know, Bill, if it were up to me, I’d hire you. We could use folks like you in regulation.  But for now, we’ve decided to go in another direction.
Lost on the Road
So, it is to this place in the road that you and I have come and now stand, with Alice, before the Cheshire Cat.  We ask them all: the trade groups, the politicians, the regulators—which way leads us out of here?  But they just smile and sit there content with the apparent security of their jobs.  But, compelled to give some answer lest they come off as rude, they utter a Zen-like response:

One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.Alice in Wonderland by Lewis Carroll
Oh, if only Bob Dylan were with us!
How does it feel
To be on your own
With no direction home
Like a complete unknown
While I would love to end this column with some poetic flair of my own, I commend to you these words of author William Faulkner when he accepted his Nobel Prize for Literature:
decline to accept the end of man. It is easy enough to say that man is immortal simply because he will endure: that when the last dingdong of doom has clanged and faded from the last worthless rock hanging tideless in the last red and dying evening, that even then there will still be one more sound: that of his puny inexhaustible voice, still talking. I refuse to accept this. I believe that man will not merely endure: he will prevail. He is immortal, not because he alone among creatures has an inexhaustible voice, but because he has a soul, a spirit capable of compassion and sacrifice and endurance…

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Exactly..what's the "next step?"  I emailed (re: the last blog you posted like this), but never heard back.  I'd be willing to volunteer both time & money to get involved.  Even though I've been in production less than a year, it doesn't take a rocket scientist that we need you and more people like you. 
C'mon guys, anyone interested in getting involved and supporting a cause, chime in on this thread and shoot Bill an email. 
 
Bill, I think many of us would act, but need  you to take the lead...I can echo Joe's "what do we do now?"
All the best..

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JoeD/Icecold:
 
First off -- I am meticulous about answering all phone, mail, email, and this forum's private messages.  If you sent me something to which you did not receive a reply, either I did not get your message or my reply is lost in cyberspace (or perhaps in your spam).  Please re-send your questions.
 
Second -- and to be quite clear -- after more than a decade during which I helped found the NASD (now FINRA) Dissident movement and have given tirelessly of my time towards reforming Wall Street's regulatory system, I'm basically fed up with the direction the movement has taken and the lack of support from member firms and registered reps.  As I believe that my recent Blog posting at http://BrokeAndBroker.com spells it out, I will not reiterate those grievances here again.
 
If you folks are truly concerned about saving your jobs, firms, and industry, then how about you all do some organizing at the grassroots level?  You have this forum and each other's contact info. Why not put together a sincere group willing to do what is necessary to get a FINRA indie/regional member firm trade group and a separate Registered Representatives trade group off the ground?  Put together a list of at least 100 names for each and contact me.  I'll be happy to work with you at that point, but I am no longer willing to try to develop that critical mass on my own, as I have tried for too long.
 
Finally, and unequivocally, I have NO INTEREST WHATSOEVER in joining any current trade group.  They have no developed enough members to be taken seriously.  They do not seem to have the desire to go toe to toe with the regulators when and if necessary.  They seem content on running their websites, getting their folks elected to yet more meaningless committees and  boards, and having annual meetings in far flung places to which no one can afford to go to anymore.
 
My long-time modus operandi remains unchanged.  Put together a steering committee of dedicated folks looking to achieve fair reforms.  Anyone looking to end regulation altogether need not apply -- we must be about more serious things.  Stop wasting money through lobbying efforts with corrupt politicians.  Stop fooling yourself about working "with" the regulators on a PURELY collegial basis.  Draft a platform of what you want to accomplish.  Ask folks who agree with the published agenda to join your group.  And then, when you have critical mass, conduct yourself seriously and do serious things.  Everything need not always be a pitched battle, but if you're not willing to stand for anything then you will stand for nothing, and your adversaries will never respect you and agree to compromise.
 
That's it.  Ball is now in your court. 

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Wow, based on the number of replies to this thread, I can see what you mean.  Kind of pathetic actually. 

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Icecold:
 
Forget about the number of replies on this RRMag forum.  Too many firms monitor online activity of their RRs and that tends to dampen the real metrics.  Trust me on this -- I get flooded with far more phone calls and emails then ever appear on the metrics noted on this site.  Even this morning I got several emails from folks wanting to do something. 
 
On the other hand, if you see at least 100 posted views to any thread, then that likely means hundreds if not thousands of potential connections (you know, the "six degrees of separation" theory). 
 
Maybe some of you could call David Geracioti:
Editor-in-ChiefDavid A. Geraciotidavid.geracioti@penton.com212-204-4215
 
and ask David if RRMAG would consider setting up a private mailbox to which folks interested in forming a trade group could send their queries--OR--perhaps RRMAG would sponsor an online meeting at which all interested folks could participate anonymously.
 
I'll copy David on this message as a head's up.  Once again, folks, if you don't think things are bad enough to try and help yourselves, then I'm not sure what else could happen on Wall Street to get you to finally come together.
 
Bill Singer

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