• Eileen Murray. Murray serves as the co-CEO of Ray Dalio’s Bridgewater Associates, the $150 billion hedge fund. Murray has also worked at a number of big Wall Street firms.

The PIABA report adds that Randal Quarles, who recently resigned from the Finra board after being nominated and confirmed as a Federal Reserve governor, co-founded the Cynosure Group, a private equity firm, which has invested in several investment advisory firms. Quarles was also a partner at the Carlyle Group. In addition, PIABA faults him for serving on the board of the U.S. Chamber of Commerce, which has been a vociferous critic of the DOL’s fiduciary rule.

“An SRO doesn’t work if it doesn’t have a majority of board members advocating for the public,” said Andrew Stoltmann, PIABA president and co-author of the report, on a call with reporters Wednesday.

“It’s particularly troubling when [public Finra board members] are on boards of corporations that have Finra-member subsidiaries” such as Legg Mason and Blackstone, said Benjamin Edwards, associate professor of law at the University of Nevada, Las Vegas, and co-author of the report.

Under Finra by-laws, public governors must have “no material business relationship” with a broker-dealer. That should include serving on the board of a firm that has Finra-member subsidiaries or affiliates, or distributes financial products through B-Ds, PIABA said.

Finra already excludes from its public arbitrator list people who are affiliated with mutual funds and advisory firms, the report said.

PIABA also hit Finra board members for serving on too many other boards, and urged Finra to establish limits to prevent such “overboarding.”

The plaintiffs’ attorney group wants to see Finra appoint as public governors investor advocates who hail from consumer groups, state regulatory agencies or PIABA itself.

“Finra likely doesn’t want true advocates who might rock the boat,” said Stoltmann, a Chicago-based plaintiffs’ attorney.

Lack of investor advocates on the board “may just be group replication,” Edwards added, that is, a tendency to nominate directors who look like current members.