Reuters: Regulatory News: FINRA vice chairman to leave, join law firm in D.C.

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FINRA vice chairman to leave, join law firm in D.C. Sep 4th 2012, 21:20 By Ashley Lau and Suzanne Barlyn Sept 4 | Tue Sep 4, 2012 5:20pm EDT Sept 4 (Reuters) - Wall Street's top self-watchdog, the Financial Industry Regulatory Authority, said on Tuesday its vice chairman will be leaving next month to join national law firm WilmerHale in Washington, D.C. Stephen Luparello, who leaves Oct. 7, has been at FINRA and its predecessor organizations, NASD, for more than 16 years. He was the second highest paid executive at the organization, with a total compensation of about $1.4 million 2011, according to FINRA's annual report. A FINRA spokeswoman said a replacement for Luparello, second in line to Chairman and Chief Executive Officer Richard Ketchum, has not yet been named. Luparello became FINRA's vice chairman in 2009 in a role overseeing the group's regulatory operations, including enforcement, market regulation, member regulation and business solutions. He also previously served as FINRA's interim chief after its former chief executive, Mary Schapiro, was appointed chairman of the U.S. Securities and Exchange Commission. Luparello's temporary leadership coincided with a period of fallout over Bernard Madoff's multibillion Ponzi scheme, during which he testified at a Senate committee hearing that FINRA did not detect fraud in any examinations it conducted of Madoff's broker-dealer arm. FINRA and the SEC would have benefited from a more formal information-sharing process, he said at the time. A 2009 report by a special committee commissioned by FINRA's board later revealed that the industry-funded regulator missed opportunities to uncover the Madoff fraud. FINRA's lack of authority to examine investment advisers was a factor in missing the fraud, according to the report. OTHER FINRA DEPARTURES The move represents a sharp change for Luparello, who spent much of his career in public service and government roles. Before joining FINRA, Luparello had worked at the Commodity Futures Trading Commission, where he was chief of staff to the chair, and the Securities and Exchange Commission, where he served as legal counsel. Luparello is among several recent high profile departures from Wall Street's self-regulatory body. In June, Reuters reported that Howard Schloss, FINRA's head of corporate communications and government relations, is ending his 12-year run with the regulator this month. Schloss was also among FINRA's highest paid executives - his total compensation topped $1 million in 2010, according to a FINRA annual report. In May, FINRA also announced it hired a former a high-ranking SEC official, Robert Colby, to replace two of its top legal advisers. FINRA General Counsel T. Grant Callery retired, while Marc Menchel, general counsel for regulation and executive vice president, said he wanted to pursue other positions. Link this Share this Digg this Email Reprints

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