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November 1, 2002

Small Firms Uprising Averted at NASD

By Staff Reports

Small broker dealer attempts to wrest control of the NASD have been put on hold. That's because the NASD has agreed to meet with a group of NASD members who were going to run a slate of candidates in this year's board elections.

The meeting is taking place because the NASD has underestimated how strong the dissident group is, according to Bill Singer, an attorney who is highly critical of the National Association of Securities Dealers. However, Grant Callery, general counsel for the NASD, said there was no pressure on the NASD to hold the meeting.

Officials of the smaller firms are expected to tell the NASD that they are concerned about enforcement issues and the way the NASD elects its officials. Singer and the members of his group have argued for a broker dealer Bill of Rights. That's because he claims that smaller firms are treated differently.

For example, he says, the misdeeds of smaller firms receive more publicity than those of the bigger ones. And he warns that, "if the NASD fails to address our concerns, then we plan to run a slate of candidates for the 2003 elections." Nevertheless, some NASD members say the charges of the smaller brokerages are not justified.

"I believe we have an open line of communication with NASD officials to make sure our concerns are known and addressed," according to Lou Denton, vice chairman of NASD's Small Firms Advisory Board. He said that NASD officials held town hall style meetings around the country. However, Signer dismissed the value of those meetings, saying "no one complains at those types of meetings."