By Joseph A. Giannone
NEW YORK (Reuters) - FINRA's board convened this week to consider proposals for making the Wall Street watchdog less secretive, but the industry regulator is keeping mum.
A majority of the Financial Industry Regulatory Authority's broker-members last month approved proposals seeking more information about how the watchdog pays executives and a new probe into its alleged ties with Bernard Madoff in the years before he pleaded guilty to running an estimated $65 billion Ponzi scheme.
FINRA said its board, which now includes three dissidents who defeated FINRA-nominated candidates, would "carefully review" each of the non-binding proposals at its next meeting, which occurred on Wednesday in New York.
But FINRA officials did not return multiple calls and e-mails from Reuters requesting information about the results of Wednesday's meeting. FINRA spokesman George Smaragdis on Thursday said the company was not commenting on the meeting.
"It is ironic: it's all about transparency, and this is further evidence that FINRA is run as a secret society," said attorney Jonathan Cuneo, who represents Amerivet Securities, the tiny California firm that submitted the proxy proposals.
"We have heard nothing. We would have expected the courtesy of a call to say whether the proposals were considered or deferred," said Cuneo, who helped Amerivet file suit last year against FINRA over many of the same pay and disclosure issues.
FINRA plays an influential role policing financial markets and supervising Wall Street brokers. Unlike the Securities and Exchange Commission it is a private company and keeps a tight lid on its activities.
With October approaching, FINRA has yet to release its 2009 annual report, which details investment results, compensation expenses and its income from fees and fines.
The push for more insight into FINRA, more than a tussle with a dissident broker, may reignite debate over previous bonuses awarded to Mary Schapiro, who was FINRA's chief executive until January 2009, when she was named Securities and Exchange Commission chairman.
The proposals also intend to review the $35,000 payments to FINRA broker-members in connection with the 2007 merger of the National Association of Securities Dealers and the regulatory arm of the New York Stock Exchange that created FINRA.
Small brokerages like Amerivet insist they could have received far higher payments.
Other proxy proposals that were to be considered by the FINRA board at Wednesday's meeting included hiring an independent inspector general, making board meetings more public and requiring more information about FINRA's portfolio investment strategies.
(Reporting by Joseph A. Giannone, editing by Dave Zimmerman)