The Securities Industry and Financial Markets Association (SIFMA) is a leading securities industry trade group representing securities firms, banks, and asset management companies in the U.S. and Hong Kong. SIFMA was formed on November 1, 2006, from the merger of the Bond Market Association and the Securities Industry Association. It has offices in New York City and Washington, D.C.
In October 2008, SIFMA laid off over 25% of its staff in the United States due to the "industry upheaval" which left its member firms in financial straits, and the loss of three of it primary member firms—Lehman Brothers, Bear Stearns, and Merrill Lynch. The dismissals came at the same time as the United States Congress pledged to revamp the country's financial regulatory structure.
SIFMA announced in May 2009 that it would also shed its London-based European operation. That operation was merged into the London Investment Banking Association (LIBA).
Mission, members, and officesEdit
SIFMA brings together the shared interests of more than 650 securities firms, banks, and asset managers. SIFMA's mission is to promote effective and efficient regulation, facilitate more open, competitive, and efficient global capital markets, champion investor education, retirement preparedness, and savings, and ensure the public’s trust in the securities industry and financial markets. SIFMA represents its members’ interests in the U.S. and in Hong Kong. It has offices in New York City and Washington, D.C., and its associated firm, the Asia Securities Industry & Financial Markets Association (ASIFMA), is based in Hong Kong.
In June 2009, SIFMA began a campaign to combat the “populist overreaction” against Wall Street’s role in the global financial crisis. It hired two aides who had worked for Henry Paulson when he was Treasury Secretary, to help cleanse Wall Street’s image in the eyes of average Americans. The effort is aimed at policymakers and the media worldwide, and designed to beat back public skepticism over Wall Street’s commitment to change. SIFMA is paying $85,000 a month for polling, lobbying, and public relations to counter the "lynch mob", according to an internal SIFMA memo. In internal memos about confidential meetings with top financial executives, SIFMA said that the securities industry "must be perceived as part of the solution, which will allow it to better defend against populist overreaction."
In January 2010, SIFMA announced that it had hired the law firm Sidley Austin to consider filing a lawsuit challenging the Obama administration's banking levy. But an attorney familiar with the matter said: "I suspect SIFMA got out ahead of its key members." One person with a large bank said SIFMA had not consulted the bank about its position, and that it was "wildly premature" to pursue legal action.
In October 2010, CEO Tim Ryan announced the organization's opposition in the residential real estate market to a "system wide moratorium on all foreclosures," reacting to problems and pullbacks in the market by a number of SIFMA members, saying a moratorium "would be catastrophic." Financial writer Felix Salmon drew attention to the position, terming it "unhelpful," detailing it as "bizarre" and "sad, ... an inchoate and unhelpful blast of opposition ... [without] constructive solutions" proposed.
Political giving and lobbyingEdit
"SIFMA's political action committees gave more than $1 million during the 2006 election season, putting the organization in the top 25 of all PACs. Its combined $8.5 million in spending on federal lobbying last year placed it in the top 30. The financial-services industry is the biggest corporate player in national politics. Only organized labor donates more money to candidates for federal offices."
SIFMA also has offices in London, though it announced in May 2009 that it would shed its European operation. The European High Yield Association (EHYA) in London is a trade association representing participants in the European high yield market. Members include banks, investors, issuers, law firms, accounting firms, financial sponsors, and other participants in the European high yield market. The European Securitisation Forum (ESF) promotes the efficient growth and continued development of securitisation throughout Europe. It advocates the positions, represents the interests, and serves the needs of its members—European securitisation market participants.
SIFMA has three product and customer-based groups that focus on the U.S.: Capital Markets, Private Client, and Asset Management. The Capital Markets Group focuses on the primary and secondary markets for equity and fixed income securities. Its customer focus is issuers, underwriters, traders, and institutional investors. The Private Client Group focuses on investment products sold to private clients, as well as individual investor education. The Asset Management Group focuses on investment products about which asset managers provide investment advice or investment management services, and on institutional investors and hedge funds.
T. Timothy Ryan, Jr., is SIFMA's CEO & President. He took the position after pulling his name from consideration for a United States Treasury Department international policy advisor position in April 2007, after problems were noted concerning Ryan's financial portfolio, and Ryan refused to take certain steps demanded by the Treasury Department's ethics lawyers. SIFMA's other senior management consists of Kenneth E. Bentsen (EVP, Public Policy and Advocacy), Ileane F. Rosenthal (EVP, Global Communications & Member Engagement), Randy Snook (EVP), and Ira Hammerman (Senior Managing Director & General Counsel).,
In August 2008, SIFMA hired Michael Paese, former Deputy Staff Director of the Committee on Financial Services of the House of Representatives, as EVP, Global Advocacy; eight months later Paese left SIFMA to become director of government affairs at Goldman Sachs. Scott DeFife, who had reported to Paese, left SIFMA in December 2009.
After the 2006 merger which created SIFMA, the organization had a co-CEO structure, with the SIA's Marc E. Lackritz and BMA's Micah S. Green filling the positions. As a 2007 report summarized it, "Lackritz [then 60] ha[d] been a friend, colleague and mentor of Green's [then 49] for two decades." However, with slower-than-hoped-for integration of the merged organization's operations, and with questions about the handling of executive loans by BMA, Green resigned abruptly that year and Lackritz assumed the role of sole CEO. Nine months later, Lackritz retired and Ryan was named CEO.
Board of directorsEdit
SIFMA's Chairman of the Board is Blythe Masters (Head of Global Commodities, JPMorgan Chase), and Vice Chair is Bernard Beal (CEO of M.R. Beal & Company). Other directors include Samir Assaf (HSBC Bank plc), Shigesuki Kashiwagi (Nomura Holdings America Inc.) and Sallie Krawcheck (former Chairman and CEO, Citi Global Wealth Management), among others.
Peter Madoff, brother of fraudster and "money manager" Bernard L. Madoff, and chief compliance officer and senior managing director of the Madoff investment advisor and broker dealer businesses, stepped down from the SIFMA Board of Directors in December 2008. His resignation came amid growing criticism of the Madoff firm’s links to Washington, and how those relationships may have contributed to the $50 billion Madoff fraud. On June 29, 2012, Peter Madoff pleaded guilty to conspiracy and falsifying records and agreed to serve 10 years in prison.
The Madoff family had long-standing ties to SIFMA. Bernard Madoff sat on the board of directors of the Securities Industry Association, which merged with the Bond Market Association in 2006 to form SIFMA. Peter Madoff served two terms as a member of SIFMA’s Board of Directors. Between 2000 and 2008, the two Madoff brothers personally gave $56,000 to political action committees controlled by SIFMA or its predecessor organizations in addition to dues paid to SIFMA by their firm, and tens of thousands of dollars more to sponsor SIFMA industry meetings. In addition, Bernard Madoff's niece Shana Madoff, who served as a compliance attorney at the Madoff firm, was active on the Executive Committee of SIFMA's Compliance & Legal Division, but resigned her SIFMA position shortly after her uncle's arrest.
In 2007 SIFMA had $105 million in both revenues and expenses. SIFMA's highest-paid officers that year were Donald Kittel (then CFO), $2.1 million, Marc Lackritz (then president & CEO), $1.5 million, and Randolph Snook (SMD), $1.1 million.
SIFMA's highest-paid officer in 2008 was its new president and CEO Tim Ryan (at approximately $2 million, for January–October). Ryan had been hired to replace Lackritz in January 2008, at a 43% ($600,000) higher level of compensation, for less than a full year. In related news, ironically, Ryan wrote in a USA Today editorial in August 2009 that compensation practices at financial services firms should align with long-term, not short-term, performance.
SIFMA's top-three highest-paid officers in the fiscal year ending October 31, 2009 were CEO Tim Ryan at $2.43 million, Executive Vice President Randolph Snook at $1.04 million, and General Counsel Ira Hammerman at $777,000. SIFMA received total revenue that year of $75 million, had total expenses of $82 million, and finished the year with a fund balance of $40 million. In 2011, Ryan's compensation was the highest among the leaders of 22 self-regulatory, dealer, governmental, and other groups in the municipal bond market, at $3.0 million.
CEO Tim Ryan earned $2.51 million base compensation (and $2.89 million total compensation) for the fiscal year ended October 31, 2012, more than the compensation of any of the officials heading the other 20 self-regulatory, industry, government, and other municipal securities-related groups. His compensation was far higher than that of the Securities and Exchange Commission Chairman Mary Jo White, who earned $165,300. Executive Vice President Ken Bentsen received a total of $1.12 million, and Randy Snook received $1.04 million.
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