NASD Regulation Announces New Reorganization; Strengthens Regulatory and Enforcement Staff
Washington, D.C.--The regulatory arm of the National Association of Securities Dealers, NASD Regulation, Inc., today announced a new organizational structure and a multi-million dollar budget increase that will continue to strengthen the organization's regulatory and enforcement capabilities.
NASD Regulation President Mary L. Schapiro unveiled the streamlined organizational structure in Chicago during an address to the NASD Regulation's Spring Securities Conference. "This new organizational structure and increase in resources will ensure that we will have the ability to participate in sweeps and other focused regulatory or enforcement initiatives critical to the protection of investors and the maintenance of market integrity."
Under this plan, which will take effect immediately, the current regulatory and oversight functions will be streamlined and made more efficient through the creation of three separate departments responsible for the bulk of the regulation of the nation's more than 5,400 securities firms and their more than 513,000 registered representatives.
The three departments are:
- Member Regulation
- Market Regulation
All three departments will report directly to Schapiro. In addition, five operating offices will be created to administer and enforce NASD Regulation programs and policies. These offices are:
- Disclosure and Investor Protection
- Disciplinary Policy
- Technology Services
- General Counsel
Schapiro also announced a corresponding staff reorganization to accommodate the new structure. These changes include:
- Linda D. Fienberg--Will join NASD Regulation as Executive Vice President of Adjudication and Chief Hearing Officer.
- Elisse B. Walter--NASD Regulation's current Executive Vice President for Legal & Regulatory Policy, will also become NASD Regulation's Chief Operating Officer.
- R. Clark Hooper--Currently NASD Regulation's Vice President for Advertising/Investment Companies Regulation, will be promoted to Senior Vice President and head of the Office of Disclosure and Investor Protection.
- Steve Luparello--Currently an NASD Regulation Vice President, will head the new Office of Disciplinary Policy.
- Daniel M. Sibears--Has been promoted to Vice President for District Oversight in the Member Regulation Department.
"These changes represent the most fundamental restructuring of the securities industry's largest self-regulatory operation since the NASD was founded more than 50 years ago," Schapiro said. The NASD Regulation Board approved these changes at its first board meeting on May 12 and 13.
The individual departments and offices are as follows:
Enforcement Department--To be headed by a yet-to-be-named senior attorney with significant law enforcement experience. The existing enforcement team of attorneys and examiners that has served very successfully as a strike force on complex and multi-district cases will be a key component of this department.
Member Regulation Department--Headed by Executive Vice President John Pinto, this department will continue to perform both cause-related and routine examinations of member firms, municipal and government securities regulation, and compliance. This department also will take over member testing and the rapidly expanding areas of preventive compliance and continuing education. Joining Pinto will be Dan Sibears, who is being promoted to Vice President for District Oversight, as this department assumes responsibility for ensuring that national standards are followed by NASD Regulation District Offices, and that customer complaints are handled properly. There are 11 separate Districts covering the U.S.
Market Regulation Department--This department will continue to perform surveillance of The Nasdaq Stock Market (also an independent operating subsidiary of the NASD). Headed by Senior Vice President James Cangiano, this department will play a critical liaison role between NASD Regulation and Nasdaq.
Office of Adjudication--Linda D. Fienberg, currently a partner at the Washington- based law firm of Covington & Burling, will join NASD Regulation as Executive Vice President of Adjudication and Chief Hearing Officer. This office will consist of the existing Arbitration Department and a new Office of Hearing Officers, a key Rudman Committee recommendation. This new office will administer the disciplinary pre-hearing and motion process and oversee discovery and the procedural aspects of disciplinary proceedings. Fienberg was formerly a senior manager at the Securities and Exchange Commission (SEC), a member of the NASD Legal Advisory Board and National Arbitration and Mediation Committee, and a member of the NASD Arbitration Policy Task Force, chaired by former SEC Chairman David Ruder.
Office of Disclosure and Investor Protection--This office will be headed by Clark Hooper, who will serve as a Senior Vice President. Responsible for the many ways in which the NASD and its member firms interact with the investing public, this office will focus especially on using today's information technologies to open up the securities industry to investors. Specifically, this office will work closely with the Office of Technology Services to establish a site on the World Wide Web where investors can contact NASD Regulation and where they can access the nationwide database of information on brokers. Making this Central Registration Depository (CRD) available through the Internet--today investors can call the NASD at (800) 289-9999 to get information--reinforces this office's mission to bring strong investor-driven disclosure components to bear.
Office of Disciplinary Policy--Steve Luparello, currently an NASD Regulation Vice President, will head this new office responsible for case review and will coordinate and oversee the development and implementation of a national regulatory plan and examination policy.
Office of Technology Services--This office will consolidate and standardize the technology used throughout NASD Regulation. Under the leadership of Senior Vice President Wendell Jones, it will ensure the appropriate application of that technology to NASD Regulation's twin goals of improved regulation and surveillance for the benefit of all investors.
Office of General Counsel--Headed by the newly-appointed Vice President and General Counsel for NASD Regulation Alden Adkins, the office will consolidate all rulemaking and legal interpretation functions of NASD Regulation, as well as the appellate disciplinary program.
The revamped organizational structure follows the strategic direction defined by the NASD Select Committee on Structure and Governance, headed by former U.S. Senator Warren Rudman of New Hampshire, and addresses the key recommendations of the Committee's landmark report.
Following are biographical sketches of the newly appointed NASD Regulation officers:
Elisse B. Walter is the former General Counsel of the Commodity Futures Trading Commission (CFTC) and the former Deputy Director of the SEC Division of Corporate Finance. She will be directly responsible for the Offices of General Counsel, Disclosure and Investor Protection, and Technology Services, as well as have indirect responsibility for all other NASD Regulation departments and offices.
R. Clark Hooper joined the NASD in 1970 as part of the organization's Corporate Finance Department. Over the last two-and-a-half decades, she has served in variety of capacities within the organization, most recently focusing on regulating the distribution of investment company information and variable products by NASD members. She is a graduate of Hollins College.
Steve Luparello, prior to joining NASD Regulation, spent a year and a half at the CFTC as Executive Assistant to the Chairman. From 1991 to 1994, he served as Counsel to Ms. Schapiro when she was an SEC Commissioner. As Branch Chief at the SEC Market Regulation Division from 1988 to 1991, Luparello administered the SEC's programs in key regulatory areas, including equities trading and derivative products, and from 1986 to 1988 was staff attorney in that Division. He received his B.A. degree from LeMoyne College, and his J.D. from the Washington and Lee School of Law.
Dan Sibears is the current Director of Regulatory Policy at NASD Regulation. He spent eight years as the director of the Anti-Fraud Department. Previously, he spent several years with the SEC and has focused his legal career on securities regulation, compliance, and enforcement. He received his J.D. degree from The Detroit College of Law and his B.A. degree from Oakland University.
The multi-million dollar increase in NASD Regulation's budget will provide 131 positions, 78 of which will be dedicated to the examination program within the Member Regulation Department, and 11 dedicated to the Enforcement Department. Recruitment for these new positions will begin immediately.
This represents an eight percent increase in staffing approved by NASD Regulation's Board of Directors. With this sizable gain in resources, NASD Regulation is moving quickly to position itself as the premier self-regulatory organization.