Ronald A. Stack, managing director and head of finance at Barclays Capital in New York, became chairman of the Municipal Securities Rulemaking Board yesterday, less than two weeks after his former firm, Lehman Brothers Inc., filed for bankruptcy protection.
Barclays bought Lehman's North American sales, trading, research, and investment banking businesses, causing Stack to have to shift from a securities firm seat to a bank firm seat on the 15-member board.
MSRB rules require the board to be made up of five representatives from banks, five from securities firms, and five members of the public, including a representative of issuers and someone representing investors. The members serve for staggered three-year terms so that five leave the board every year.
But the reordering of Wall Street firms that rippled from the financial crisis - Lehman's bankruptcy filing and the moves of other securities firms, such as Goldman, Sachs & Co., Morgan Stanley, and Merrill Lynch & Co., to become bank holding companies or acquired by banks - left the MSRB with two vacant slots for securities firm members as it started its new fiscal year yesterday.
Kevin L. Willens, a managing director at Goldman, resigned from the board last week after his firm applied to become a bank holding company. Donald O'Brien, a former managing director at Morgan Stanley, left the board earlier in the year.
As a result, the board currently only has three securities firm representatives: Michael G. Bartolotta, vice chairman of First Southwest Co. in Houston; Maud Smith Daudon, president and chief executive officer of Seattle-Northwest Securities Corp. in Seattle; and Stanley E. Grayson, president and chief operating officer at M.R. Beal & Co. in New York.
The MSRB plans to advertise for candidates for those two posts and will eventually nominate and elect individuals to fill them, board spokeswoman Jennifer Galloway said. It can continue to meet with 13 members because it still has a 10-member quorum, she said.
Stack replaces Frank Chin, managing director and manager of public finance at Citi, who had planned to stay on for another year but stepped down to preserve the balance of representatives on the board, according to the MSRB.
"It is with great regret that we are losing such a distinguished member who has accomplished so much," Stack said in a statement. "However, the new board remains fully prepared to meet the demands of a changing and complex regulatory environment and to fulfill its mission of protecting investors and preserving the integrity of the municipal market."
Peter T. Clarke, a managing director at JPMorgan in New York, is board's new vice chair.
Besides Stack and Clarke, the bank representatives are: James A. Posthauer, director of municipal trading and underwriting at SunTrust Robinson Humphrey in Atlanta; Martin H. Vogtsberger, vice president and managing director at Fifth Third Securities Inc. in Columbus, Ohio; and Stephen C. Wool, an executive in municipal sales at Keybanc Capital Markets in Chicago.
The public members are: Terry Agriss, retired vice president of Consolidated Edison Co., Frank Thomas Howard, executive director of the Office of Financial Management in Kentucky; David A. Lipton, director of the Securities Law Program in the School of Law at Catholic University of America in Washington; Kathleen A. McDonough, retired senior managing director of Ambac Financial Group in New York; and Robert M. Zuback, senior portfolio manager at Allstate Investments LLC in Northbrook, Ill.
