Who Defends the Rights of the Muni Investor? Not the MSRB!


Who advocates on behalf of Muni Market investors?

Who represents the public when it comes to the Muni Markets?

Forget President Obama, and the House, and the Senate.

You should also pretty much forget the SEC.

The SEC focuses on small Muni segments in regards to fraud.

The NASD or FINRA is supposedly "enforcement" of everything else in the Muni Markets, but in truth they represent Wall Street because they are Wall Street. They are the National Association of "Securities Dealers." They are a Wall Street trade group.What is worse is they can actually hide by saying the rules regulating the Muni Markets are not clearly written. Rules for the Muni Markets, as well as for a lot of U.S. State and Local public finance, are written by a thing called the Municipal Securities Rulemaking Board or MSRB.

The MSRB has been in existence since 1976. Unfortunately, the "Muni industry" or Wall Street investment banks put themselves in charge of it. So for the past 35 years the rules governing the Muni Markets and public finance have been controlled and written by those that make money by the issuance of more borrowing, more bonds, more new issue underwriting.

There is another group you should know. It was called the Bond Market Assocation or tBMA but recently changed to the Securities Industry and Financial Markets Assocation or SIFMA. SIFMA is the most powerful Wall Street trade group and lobbying group. They do not represent the public nor investors. But their membership has made up all the membership of the board of the MSRB. It has been like this since the 1970's.

So in 2010 the Federal Government thought there should be Financial Regulation Reform. There was an effort to change the make up of the Board of the MSRB to be "public" representatives. It should come as no shock that it got all fouled up.

Of 21 MSRB Board Members... 10 represent Wall Street.

The other 11 are supposed to be majority "public". But this is far from reality.

4 of these 11 represent "Issuers." Issuers are States, Counties, Cities and so on who issue securities to borrow money. In the Muni Markets, Issuers do not represent the investing public...it's opposite. It's like having venture capitialists and corporate CEO's represent the investing public and write rules regarding the IPO process.

Here are the other 7 who represent the investing public.

Robert Fippinger
Fippinger is a career bond lawyer for Orrick, a major bond lawyer. Orrick does not represent the public.

Bob Jackman
Bob Jackman was a career bond trader for Bear Stearns. He retired two years ago and now supposedly represents the investing public.

David Madigan
David Madigan is an institutional guy. He works for Breckenridge Capital.

Kathleen McDonough
Kathleen McDonough was a career Rating Agency analyst now retired and also now supposedly representing the investing public.

Mark Muller
Mark is an institutional guy. He now works for Loews Corp.

Ben Thompson
Ben Thompson is another institutional guy. He works for Samson Capital.

Chris Trower
Chris Trower is window dressing...great resume but in truth knows little about Municipal Bonds and U.S. subsoverign public finance. His claim to fame is a tax case in which he represented an Issuer...a State...against investors.

In sum, no one represents the investing public when it comes to Municipal Bonds and public finance... except me.