WASHINGTON — The Municipal Securities Rulemaking Board yesterday announced the names of its top two new officers as well as the five new members who will join its 15-member board beginning Oct. 1.
It also filed with the Securities and Exchange Commission rule changes to speed up the timetables for syndicate managers to disburse profits to the syndicate members and to expedite settlements of so-called secondary market trading accounts.
The changes, to Rule G-11 on new-issue syndicate practices and Rule G-12 on uniform practices, were drafted in May to address an issue that surfaced when Lehman Brothers filed for bankruptcy last year and profits were withheld from syndicate members in muni transactions that had been senior managed by the firm.
The MSRB is asking the SEC to implement the G-11 amendments for new issuances with a time of formal award more than 30 calendar days after they are approved. It is also asking for the G-12 changes to apply for secondary market trading accounts formed more than 30 days after the amendments are approved. But both sets of changes must first be subject to a round of public comment through the SEC. Commission approval would then be needed before they can be implemented.
Specifically, the changes would trim to 30 calendar days from 60 the timeframe for syndicate managers to disburse general group order profits to syndicate members as well as require the settlement of secondary market trading accounts within 30 rather than 60 calendar days.
The MSRB also formally announced yesterday that Peter Clarke, managing director at JPMorgan in New York, will serve as chair of the board beginning this fall, as previously reported by The Bond Buyer.
Clarke will succeed Ron Stack, whose term as chairman expires Sept. 30. Stack, whose bank dealer term on the board also expires this fall, has resigned from Barclays Capital to head the northeast group in Wells Fargo & Co.’s public finance department.
Meanwhile, Alan Murphy, senior vice president at Duncan-Williams Inc. in Memphis, will become vice chair. Both new officers will serve one-year terms.
The MSRB also announced five new members, who will serve three-year terms and fill two bank dealer seats, two securities dealer seats, and one seat for members of the “public.”
By statute, the board is made up of five securities firm representatives, five bank-dealer officials, and five members of the public, including a representative of the issuer community and a representative of investors. The members serve three-year staggered terms. Each year the board elects a new chairman and vice chairman, as well as five new members.
The officers and individuals were elected at the board’s quarterly meeting in San Francisco last month, but the MSRB typically waits several weeks before formally revealing their names to the public.
Michael Bartolotta, vice chairman at First Southwest Co. in Houston, and Kevin Willens, managing director at Goldman, Sachs & Co. in New York, will fill the two vacant bank-dealer seats. Bartolotta resigned from a securities dealer seat on the board last year when First Southwest was purchased by a bank. Similarly, Willens resigned from a securities seat when Goldman became a bank holding company.
Stephen Heaney, managing director and head of public finance at Stone & Youngberg LLC in San Francisco; and Alan Polsky, senior vice president at Dougherty & Co. in Minneapolis, will fill the two securities dealer seats.
Mark Muller, senior vice president and municipal portfolio manager at Loews Corp. in New York, will fill the seat for a public official, serving as a representative of investors.
“The experience and depth of the MSRB’s new leadership and board members will preserve and enhance our ability to protect investors and promote a fair and efficient market,” said MSRB executive director Lynnette Hotchkiss, in a statement. “We have never been more committed to fulfilling our mission and these seven individuals will ensure that we remain a vital force in the market.”
Clarke, who has served on the MSRB since 2007 and has worked at JPMorgan since 1977, where he began in institutional sales and moved to underwriting in 1982. Since then he has held several management positions and is now vice chairman of tax-exempt capital markets.
Currently vice chair of the MSRB, he is also serving his second term on the board, having served previously from 1990 to 1993. He is a former member of the municipal syndicate and trading committee of The Bond Market Association, one of SIFMA’s predecessor organizations. He is also a former board member of the Municipal Forum of New York. He received a bachelor’s degree in English from the University of Virginia.
Prior to joining Duncan-Williams, Murphy worked at Popular Securities as managing director to U.S. capital markets operations and also spent 28 years at Prudential Securities as the head of municipal underwriting and co-head of tax-exempt fixed income.
Murphy was a member of the MSRB from October 2006 through January 2008. He joined it last October to fill slots for securities firm representatives that were left vacant because of the restructuring of major Wall Street broker-dealers. He is a former member of the TBMA municipal executive committee and a member of the regional advisory committee. He received a bachelor’s degree in economics from the University of North Carolina at Wilmington and an MBA in finance from the University of Tennessee.
Bartolotta serves on the board of directors of First Southwest, First Southwest Holdings LLC and PlainsCapital Bank in Dallas. He also serves as chairman of First Southwest’s public finance management committee. He has more than 22 years of experience in public finance serving as either financial adviser or underwriter for a wide variety of clients and issuers.
He is also an active member of the board of directors of TexSTAR, a local government investment pool. In addition, he serves as an advisory board member to LOGIC, another local government investment pool. Bartolotta received a bachelor’s degree in actuarial science from the University of Illinois.
Heaney has more than 30 years of experience in municipal finance, primarily spent at Stone & Youngberg, where he is the head of public finance and serves on the executive committee of the firm as well as on its board of directors. Earlier in his career, Heaney worked for E.F. Hutton & Co. as first vice president and manager of its Los Angeles public finance office.
He began his career as a municipal analyst at Moody’s Investor Service and has been a member of the California Public Securities Association’s board of directors and the Regional Bond Dealers Association’s municipal bond division executive committee. Heaney received a bachelor’s degree from Texas Tech University and a master’s degree in public administration at Syracuse University. He also attended the Public Finance Institute at the University of Michigan.
Prior to joining Loews in 1995, Muller served as vice president of asset management, and municipal portfolio manager with Goldman Sachs. He began his career with Van Kampen Merritt Investment Advisory Corp., where he served as a research analyst, assistant trader and later, as assistant vice president and senior municipal portfolio manager for the firm.
He is a member of the Society of Municipal Analysts and a past president and governor of the Municipal Forum in New York. Muller received a bachelor’s degree from the University of Southern California and a master’s of management degree from the Kellogg Graduate School of Management at Northwestern University.
At Dougherty, Polsky is responsible for the company’s negotiated municipal underwriting and fixed-income institutional sales and research. During nearly 25 years with the firm, he has also served as director of research for the tax-exempt sector and was a tax-exempt trader. Prior to working at the firm, he was controller for the University of Minnesota Foundation.
He has also served as an audit manager for Peat Marwick and Mitchell and was chairman of the National Federation of Municipal Analysts. He received a bachelor’s degree in business administration from the University of Wisconsin-Madison.
Since 1992, Willens has served in several leadership roles in the public sector and infrastructure finance unit at Goldman and is currently co-chief operating officer. He manages the firm’s public finance business across the country and is co-head of the national infrastructure group.
Willens has also served as head of the municipal capital markets group for the firm. Prior to joining Goldman, he was vice president of Dean Witter’s public fiance department and began his career in the public finance department at L.F. Rothschild. He received a bachelor’s degree in economics and computer studies from Northwestern University.
In addition to Stack, the four other members leaving the board at the end of September are: Maud Smith Daudon, president and CEO of Seattle-Northwest Securities Corp.; Michael Imhoff, managing director at Stifel Nicolaus & Co. in Denver; James Posthauer, director of municipal trading and underwriting at SunTrust Robinson Humphrey in Atlanta; and Robert Zubak, senior portfolio manager at Allstate Investments LLC in Northbrook, Ill.
