Lanny Schwartz out as MSRB chief regulatory officer

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Municipal Securities Rulemaking Board Chief Regulatory Officer Lanny Schwartz has resigned, depriving the MSRB of a senior lawyer as the regulator moves toward a future without its longtime leader.

Three people with knowledge of the situation confirmed that Schwartz, who joined the MSRB in April 2018, would be departing. His resignation is only one aspect of what appears to be a shakeup in MSRB leadership following the announcement that President and CEO Lynnette Kelly will step down Sept. 31.

The MSRB declined to comment.

Schwartz joined the MSRB as an experienced regulatory lawyer, having spent some 13 years leading the trading and markets practice at the firm of Davis Polk & Wardwell, where he advised broker-dealers, banks, swap dealers, securities exchanges and others on various regulatory and transactional matters, including the MSRB’s dealer and municipal advisor rules.

He quickly took on a prominent role for the MSRB, assuming the lead lawyer position on most rulemaking while MSRB General Counsel Michael Post took on a more traditional general counsel role advising the board on various legal matters. Schwartz has a good reputation among his peers, who have consistently praised him for a deep practical understanding of regulatory issues.

The MSRB has had a lot of turnover in its senior legal positions in recent years, leading to several position shuffles. Gary Goldsholle, now a partner at Steptoe & Johnson in Washington, left the position of general counsel in 2014 after having held it for about two years. Several months later in 2015 the board named Robert Fippinger to a new position of chief legal officer, promoting then deputy general counsel Post to general counsel of regulatory affairs.

Fippinger left the MSRB in July 2017, leading to another promotion for Post to general counsel and the naming of Gail Marshall as chief compliance officer.


Multiple sources independently confirmed that prior to Kelly’s and Schwartz’s decisions to leave the MSRB, the board had conducted an internal staff survey that “didn’t go well” and reflected “a lot of dissatisfaction.”

“It’s no secret employee morale at the MSRB is atrocious,” said one source. “They can’t keep a lawyer to save their life.”

Another source said that a possible contributing factor to the leadership changes was a rule change that took effect for the board’s 2017 fiscal year extending board member terms to four years from three. The added time and perspective of that extra year could have played a role for some board members, the source said, noting that it is not typical for self-regulatory organizations to have one leader for as long as Kelly’s 12 years helming the MSRB.

She is only the fourth executive director at the MSRB since its creation in 1975. Her predecessor, Christopher “Kit” Taylor, held the job 28 years. The MSRB had begun to come under fire from Capitol Hill, with Louisiana Republican Sen. John Kennedy sponsoring a bill that would give the Securities and Exchange Commission much more direct control over the MSRB. Presidential hopeful Sen. Elizabeth Warren, D-Mass., in co-sponsoring the legislation, referred to the MSRB as a “revolving door” for the industry.

Another recent departure from the MSRB is that of Chief Communications Officer Jennifer Galloway, who had skippered the MSRB’s external communications since 2008. Her duties have been absorbed by Leah Szarek, who had previously been part of Galloway’s communications team but had transitioned into a different role, managing EMMA as senior manager, market transparency. The press release announcing Kelly’s retirement listed Szarek as director of communications.

The board has appointed Nanette Lawson, MSRB chief financial officer, as interim CEO while it looks for Kelly’s replacement. Sources were unclear on whether the MSRB will seek to replace Schwartz as chief regulatory officer or redistribute his duties.

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