A revolving door blurs the lines between one of the nation’s most important regulatory agencies and the interests it regulates. Former employees of the Securities and Exchange Commission (SEC) routinely help corporations try to influence SEC rulemaking, counter the agency’s investigations of suspected wrongdoing, soften the blow of SEC enforcement actions, block shareholder proposals, and win exemptions from federal law. The revolving door was on display in 2012 when the investment industry opposed one of the top priorities of the SEC chairman, a plan to tighten regulation of money market funds. Former SEC employees lobbied to block the plan, and an SEC Commissioner who previously worked for an investment firm played a pivotal role in derailing it. The movement of people to and from the financial industry is a key feature of the SEC, and it has the potential to influence the agency’s culture and values. It matters because the SEC has the power to affect investors, financial markets, and the economy. Yet, the SEC has exempted certain senior employees from a “cooling off period” that would have restricted their ability to leave the SEC and then represent clients before the agency. In addition, the SEC has shielded some former employees from public scrutiny by blacking out their names in documents they must file when they go through the revolving door.
Posted on: Mon, 23 Sep 2013 16:45:09 +0000
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