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MSRB Elects Jay Goldstone as Chair; Steve Heaney as Vice Chair

WASHINGTON — The Municipal Securities Rulemaking Board has named Jay Goldstone, chief financial officer and chief operating officer of San Diego, as its new board chairman, effective Oct. 1 for a one-year term.

Goldstone will succeed current board chairman Alan Polsky, senior vice president of Minneapolis-based Dougherty & Co. LLC.

Stephen E. Heaney, managing director for Stone & Youngberg, a division of Stifel Nicolaus, was elected vice chair.

Goldstone and Heaney were elected by the MSRB at a three-day board of directors meeting in Seattle. The MSRB has scheduled a conference call with reporters for Monday to discuss actions taken at the board meeting.

Goldstone, who could not be reached for comment, has 30 years of municipal finance experience. He has been San Diego CFO and COO since 2007 and a member of the MSRB’s board since October 2010. He also has served on the MSRB issuer advisory group.

Prior to joining San Diego, Goldstone worked for 10 years as director of finance for the city of Pasadena, Calif., according to San Diego’s website. He also been manager of finance for Maricopa County, Ariz., and interim city manager and director of finance for the city of Richmond, Calif.

Goldstone has a BA in political science, economics and business administration from The University of Minnesota, an MA in public administration from Arizona State University, and an MA in business administration from Santa Clara University.

John McNally, an attorney with Hawkins Delafield & Wood LLP., said Goldstone has been instrumental in helping make San Diego a model city for its disclosure procedures and training, as well as accounting and auditing controls and procedures. He noted that Goldstone also helped create an audit committee and hired an independent auditor.

McNally added that Goldstone’s appointment is also a “nice pat on the back to San Diego,” and a “credit” to the city’s disclosure and auditing improvements. McNally’s firm is disclosure counsel to the city.

Goldstone worked for San Diego during an investigation of five city officials by the Securities and Exchange Commission.

The SEC filed charges against the officials in April 2008, alleging that they knew San Diego intentionally underfunded its pension obligations to increase benefits while deferring costs.

In Oct. 2010, three officials agreed to pay fines of $25,000 and one official agreed to pay $5,000.

Peg Henry, former MSRB general counsel who is currently senior vice president and assistant general counsel at investment banking firm Jefferies & Co., called Goldstone a good choice for the top board slot.

“I think he would make an excellent choice. He is a good consensus-builder and is well-respected,” she said.

Goldstone will assume his post roughly two years after the MSRB changed the makeup of its board to include a majority of so-called “public members” — those who are not affiliated with brokers, dealers or municipal advisors — as required by the Dodd-Frank Act. The act also expanded the board’s mission to include the protection of state and local governments.

But Goldstone isn’t the first issuer official to be board chair. Alice Handy was elected MSRB chair for the board’s 1996 fiscal year when she was treasurer of the University of Virginia.

Christopher “Kit” Taylor, executive director of the MSRB from 1978 to 2007, noted that Goldstone has a record of helping municipalities improve disclosure processes. Taylor said the MSRB has a long history of ensuring the board includes members who are affiliated with dealers and issuers, but that he would like to see the board name a chair from the investor community.

Mike Nicholas, chief executive officer of Bond Dealers of America, called Goldstone a “great choice.”

Heaney joined the MSRB in 2009 and has more than 30 years of experience in muni finance. He is a past chairman of the California Public Securities Association. He received a BA from Texas Tech University and an MA in public administration from the Maxwell School at Syracuse University.

“Steve has, since our founding, helped to enhance the BDA as the industry’s predominant trade association,” said Nicholas. “He continues to be a proven and recognized leader in the muni markets.”

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