The Small Firm Advisory Board (SFAB) election is now underway in the New York Region.  All executive representatives of firms in the New York Region will soon receive Election Notice 10/21/10 and a ballot to vote for a candidate.  Ballots are due no later than Friday, 11/19.  The newly elected SFAB member will take office in January 2011.

Who's Eligible to Vote.   FINRA small firms in the New York Region as of the close of business on 10/20/10, are eligible to vote for one of the candidates.  Firms are urged to vote in the election of SFAB members.  [FINRA Small Firms Info, Election Notice, 10/21]

Who's Running.       (i) Douglas Preston; (ii) Steven Jafarzadeh;  (iii) David J. Laubach;  (iv) Miriam Lefkowitz;  (v) David V. Shields.  See bios after the jump.

Douglas Preston.   SVP, Compliance Exec - Merrill Lynch Professional Clearing Corp.   "Doug's experience includes acting as the Chief Compliance Officer of a number of small firms including: Merrill Lynch Professional Clearing, Santander Investment Securities, Scotia Capital Markets and Bozano, Simonsen Securities. Doug was also Senior Special Counsel for NYSE Member Regulation."

Having worked in numerous roles in the industry—from a clerk at EF Hutton and Transfer Agent at DTCC to senior legal and compliance roles—I have gained broad-based knowledge of how small firms operate and the unique challenges they face in this regulatory environment.

Steven Jafarzadeh, CCO - Stonehaven, LLC.   "For the past decade, I have served in instrumental roles within independent, small firm broker dealers overseeing compliance, trading and operations.  I have consistently served as the primary, and often sole, point of contact with FINRA and the SEC for multiple cycle exams which has given me unique insight and experience as to the practical application and efficacy of these exercises.  I believe my career and related experience provide a sound balance of proficiency, acute awareness of specific and critical issues facing the industry, and a fresh perspective to the incumbent thought process."

I am running for an SFAB seat because I feel the need to represent small firms and their sustainability and critical contribution to the general member firm universe.  Now, more than ever, the small member firms’ voice is getting lost amongst the malfeasance, initiatives directed towards larger firms, and political under currents.  I am committed to protecting the interests of small firms in a fair, equitable and compliant manner, and I believe the board truly needs fresh perspective to address our current issues.

David J. Laubach, CCO - Scarsdale Equities LLC.   "In the small firm Broker-Dealer business since graduating from NYU in 2003, I have been trained in the regulatory and compliance aspects of the industry for the last five years.  I began my career as an execution trader and operations employee, learning the business from the bottom up."

As a compliance professional with real world experience in market-making, trading, and all aspects of the back office, I fully understand and cope with the challenges small firms face while struggling to comply with policies primarily designed to regulate multi-faceted, multi-branch mega-firms.

Miriam Lefkowitz, General Counsel - Shufro, Rose & Co., LLC.    "I have spent 12 of the past 15 years working with and for privately held, small and regional dually registered broker dealers/investment advisers. For the remaining three years, I served as an enforcement attorney at the SEC, where I gained insights into the regulatory process and how enforcement decisions are made."  For 5 years, I was the General Counsel/Chief Compliance Officer, and a Member of the Board of Directors of J.B. Hanauer & Co., a municipal bond firm which also offered a full range of brokerage and advisory services through its clearing firm’s platform. Hanauer was among the larger “small firms,” with approximately 145 brokers and offices in several states.  Etc, Etc, Etc."

Each year, small firms face ever-greater challenges—many of which arise from regulatory developments.  In my role General Counsel to two small firms, I have had hands-on, daily involvement with a myriad of compliance, legal and operational issues. I have experienced firsthand how these changes can burden small firms’ budgets, disrupt their business models and stretch personnel, sometimes to the point that remaining independent begins to seem infeasible.  Etc, Etc, Etc.

David V. Shields,  Vice Chairman - Wellington Shields & Co., LLC.   Graduated from University of Pennsylvania (Wharton, B.S. Economics) in 1961 and entered the brokerage business in London while attending London School of Economics for graduate school. In 1966 I bought a seat on the NYSE and registered as an independent broker dealer in 1975. In 1982 my brother and I co-founded Shields & Company, a broker dealer and RIA. Shields merged with H.G. Wellington & Co. in 2009 to form Wellington Shields & Co. Current business is a mix of institutional and high net worth retail and managed accounts with 68 brokers and seven offices. From 1980 to 1986 I served as President of the Alliance of Floor Brokers and was selected as a Governor of the NYSE from 1982-1986. In 1986 I was elected to the Board of Directors of the NYSE as the first floor broker to fill a seat created specifically for agency representation. During my six year tenure (3 terms) my committee service included the NYSE Committee for Review, Audit Committee and Market Performance Committee among others. I have served as an expert witness and been involved in many mediations and hearing panels. I have lobbied Capitol Hill and regulators on industry issues. Currently, I serve on the Board of National Organization of Investment Professionals as a past chairman. Over the years, I have lectured widely on capital markets both in the US and abroad."

Small firms have been swept into a regulatory morass designed for much larger, national, full line firms. The requirement of small, in many cases niche, firms to comply with a broad range of regulations that are in place for products and services that the small firms do not provide, has led to a regulatory overkill that is truly anti-competitive. Fines and penalties have out stripped offenses. Rather than encouraging entrepreneurship, regulators seem to feel bigger is better, put a belt and suspenders on everything and the cost to the small firms be damned. Large firms print phone books for compliance manuals and can afford a battery of compliance officers and lawyers to fend off overzealous regulators. Small firms should not have written supervisory procedures for things they do not do. Minor offenses should not be treated as felonies. Of course the public must be served, but regulatory overkill with commensurate costs and little if any demonstrated benefit depletes the resources of honest endeavor to public disadvantage. Over regulation layers in costs that must ultimately be passed through to the customer.