FINRA Announces Process to Fill Upcoming Vacancies on the National Adjudicatory Council

Summary

The purpose of this Election Notice is to: (1) notify members of an upcoming election to fill one large firm seat and one small firm seat on the National Adjudicatory Council (NAC); (2) announce the FINRA Nominating & Governance Committee (Nominating Committee) nominees for these vacancies; and (3) describe the procedures to be included as an additional large or small firm candidate on the ballot.

If more than one candidate is certified for either the large or small firm vacancy, the election will be deemed contested. If the election is contested, the official Election Notice and ballots will be distributed to the executive representatives¹ of eligible large and small FINRA member firms on or about December 30, 2024.

Questions regarding this Election Notice may be directed to Jennifer Piorko Mitchell, Vice President and Deputy Corporate Secretary, via email or at (202) 728-8949.

Background

The NAC is appointed by the FINRA Board of Governors to review all disciplinary decisions issued by FINRA hearing panels, and presides over disciplinary matters that have been appealed to or called for review by the NAC. The NAC also reviews statutory disqualification matters, considers appeals of membership proceedings, exercises exemptive authority and acts in other proceedings as set forth in the Code of Procedure.

The NAC comprises 15 members—seven industry members and eight non-industry members. The seven industry members of the NAC include two small firm, one mid-size firm, two large firm and two at-large industry members. Of the eight non-industry NAC members, at least three are public members.

The NAC meets primarily in person four times a year, several weeks prior to each FINRA Board of Governors meeting. NAC members are expected to attend meetings; will be requested to serve on appeal panels, which involves reading the record of the case and attending oral arguments; and are asked occasionally to participate in conference calls to handle other NAC matters. Potential candidates should ensure that their other commitments will allow for their full participation at all NAC meetings.

Election of NAC Members

There are two vacancies on the NAC to be filled in this election. The elected large firm NAC member will replace a NAC member who vacated the seat early.² Regarding the small firm seat, when the vacancy was previously announced, no individuals submitted the requisite petitions to be included on the ballot as a candidate and the nomination process is therefore starting anew.

FINRA Nominating Committee Nominees

The Nominating Committee has nominated the following individuals for the open NAC seats:

• Large Firm Member Nominee:
  • Richard Kuhlman, Senior Vice President and Chief Legal Officer, Cambridge Investment Research, Inc.
• Small Firm Member Nominee:
  • Trinity Lee, President and Executive Director, Heim, Young & Associates, Inc.

Profiles of the Nominating Committee nominees are included as Attachment A. The new NAC members will each serve a four-year term beginning in 2025 and concluding in December 2028.

Petition Process for Candidates

Pursuant to Article VI, Section 6.2 of the FINRA Regulation By-Laws, a person who has not been nominated may be included on a ballot for an election to fill an open seat on the NAC if:

1. within 45 days of the date of this Election Notice, such person presents to the Corporate Secretary of FINRA petitions in support of his or her nomination duly executed by 3 percent of the members entitled to vote for such nominee’s election; and
2. the Corporate Secretary certifies that the petitions are duly executed by the executive representatives of the requisite number of members entitled to vote for such nominee’s election, and the person satisfies the firm-size classification of the NAC seat to be filled, based on such information provided by the person as is reasonably necessary to make the certification.

As of the close of business on November 6, 2024, the number of FINRA small firms was 2,962 and large firms was 148. Therefore, the number of required petitions for a small firm petitioner is 89 and for a large firm petitioner is five. 

Individuals interested in petitioning to become candidates must complete a candidate profile form (Attachment B) and submit it to FINRA’s Corporate Secretary for a determination that the individual is qualified to serve in the seat for which he or she is petitioning to be nominated. Individuals seeking election as a NAC member have an obligation to satisfy the firm-size classification on the date the petition is circulated, the date the petitions are certified by the Corporate Secretary and during the election period. Individuals who fail to meet this requirement will be disqualified from election. 

Petitioners must provide information sufficient for the Corporate Secretary to determine that the petitions are duly executed by the executive representatives of the requisite number of applicable-size firms. Firms may only endorse one petitioner for the same firm-size seat as their own firm size. No firm may endorse more than one such petitioner. If a firm does endorse more than one petition for a specific vacancy, the later-dated petition will supersede any previously submitted petition. To assist in the process of verifying petitions, FINRA requests that all submitted petitions be dated by their signatory. Petitions must be submitted by December 23, 2024.

Endnotes