Black municipal securities professionals are not "just another group" interested in having representation on the Municipal Securities Rulemaking Board, an industry trade group chairman told the U.S. Commission on Civil Rights yesterday.
"To call us one of many is insensitive," said Alphonso E. Tindall Jr., a lawyer and chairman of the National Association of Securities Professionals. The group represents minority and women securities professionals.
Tindall gave his testimony during the final day of commission hearings on racial and ethnic tensions in New York City. The Wednesday session focused on equal opportunities for minorities and women in the finance industry, and on access to capital.
The association chairman likened the MSRB to a "club" of "old money" that encompasses the major Wall Street firms. "The club has grown, but it effectively has the same type-of members that it housed 50 years ago," Tindall said.
In response to criticisms that the MSRB has not had a black board member since its inception in 1975, MSRB executive director Christopher Taylor said in Monday's edition of The Bond Buyer: "There are many groups who want to have someone on the board," and "the key to this is to make sure the rule making process is as open as possible."
Tindall said at yesterday's hearing that Taylor's comments indicate that he "has no interest in diversity -- in including those who have been kept out."
Tindall participated in a panel that comprised him, Paul Spivey, executive director of Sponsors for Education Opportunity, and Jeffrey Liddle, a lawyer who specializes in employment discrimination issues. Spivey's group sponsors summer internships at investment banks for minority college students.
The hearings are pan of a multiyear Civil Rights Commission investigation into the increase in racial tensions throughout the United States. No additional hearings are expected to be held this year. A final report on the New York hearings is not expected for approximately a year, a commission staff member said.
During his testimony, Tindall also defended the association's position that MSRB Rule G-37 curbing political contributions adversely affects women and minority securities professionals and politicians.
In response to a question from a commissioner about whether investment bankers were getting business "thrown to them on the basis of a campaign contribution," Tindall said he not believe that bankers "get business because they make political contributions."
However, Tindall said he did believe "there is corruption in. the business" and that there has been for some time.
"This is an economic issue" Tindall said, arguing that some firms favoring the MSRB rule are mainly concerned with making money by limiting the number of competitors.
In the past, minority politicians have pushed for inclusion of minority investment bankers, Tindall said. In an interview following his testimony, Tindall said contributions merely gave bankers an opportunity to present their credentials and did not result in unwarranted business.
In a prepared statement submitted to the Civil Rights Commission, the association recommended that G-37 be modified to require only that municipal finance professionals fully report and disclose political contributions to issuers. The group also called for the role to be extended to cover holding companies, subsidiaries, and all personnel of Wall Street firms.
The association recommended that the MSRB and the SEC form a task force to include minority and female municipal securities professionals in any deliberations on Rule G-37, its impact, or proposed changes.
The trade group also asked that the SEC and the MSRB commission a study to determine whether there are less restrictive regulatory alternatives that "do not assault basic civil liberties and citizenship rights but that ensure the integrity of the municipal securities market."
In a statement written on the SECs behalf. Richard H. Walker, a regional director for the SEC, said the agency was committed to diversity and inclusion in the financial sector work force and to conveying the message to Wall Street.
Walker pointed out that the SEC does not have the power to regulate equal employment or civil rights issues. He also said the agency disagrees with the association's charge of disparate treatment of minorities.
"The SEC has reviewed the report and disagrees with its analysis of the issues," the statement said, referring to an association position paper issued earlier this year on the MSRB role. "The report does not fairly describe the SEC's actions, the record before the SEC at the time the approval order was issued, or the constraints governing the SEC's approval process," Walker said.
"The SEC is not aware of any evidence indicating that pay-to-play promotes diversity in underwriting syndicates, nor does the NASP report purport to provide such evidence," the commission statement said.
Separately, U.S- Rep. Edward J. Markey, D-Mass., chairman of the House Energy, and Commerce telecommunications and finance subcommittee, praised the Civil Rights Commission proceedings in a statement.