The Public Investors Arbitration Bar Association says Finra’s public board members may not truly represent the investing public.

In a report released Wednesday, PIABA criticized Finra for having five current public governors who have ties to securities and advisory firms.

PIABA, which represents investor plaintiff attorneys, says it reviewed publicly available information about Finra’s current public board members as well as public members within the last five years.

“We found that public governors often came to the posts after long industry careers at influential Wall Street firms,” the report said.

Finra’s board, with a majority of public governors, is designed to avoid undue influence from the industry it regulates. The board has 13 seats designated for public members, 10 for industry representatives, and one seat for Finra’s chief executive officer.

But PIABA says several public members appear to be too close to member firms. It faulted five current public governors specifically:

• William Heyman. Currently chairman of Finra’s board, Heyman has a long career in the brokerage industry and is now chief investment officer for The Travelers Companies. He also serves on the board of Bank Leumi USA, which has a broker-dealer subsidiary, the report said.  

• Carol Anthony Davidson. Davidson is on the board of Legg Mason, whose subsidiary Legg Mason Investor Services, distributes the company’s funds.

• Rochelle Lazarus. Lazarus is on the board of the Blackstone Group, the alternatives manager, which has multiple Finra-member subsidiaries, the report says. Lazarus is also chairman of the Ogilvy & Mather advertising firm, where she was formerly the chief executive. In 2015, Ogilvy created Finra’s BrokerCheck advertising campaign, PIABA said.

• Joshua Levine. Levine has had a long industry career, with stints at Morgan Stanley,  Deutsche Bank, and as chief technology and operations officer at E*Trade. Levine is listed as managing director of Kita Capital, a consulting firm whose website lists clients such as CapitalOne and WisdomTree.

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