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The Resignation of the SEC’s New Enforcement Director is an Opportunity to Break the SEC’s Corrupting Practice of Hiring Wall Street Defense Lawyers

FOR IMMEDIATE RELEASE
Wednesday, April 28, 2021
Contact: Pamela Russell at 202-618-6433 or prussell@bettermarkets.com
 

Washington, D.C.  –  Dennis M. Kelleher, President and Chief Executive Officer of Better Markets, issued the following statement in response to the Securities and Exchange Commission’s (SEC) announcement that the new Director of Enforcement has resigned:

“The SEC has failed the American people by repeatedly selecting Wall Street defense lawyers as Directors of Enforcement. They come to the SEC with needless and unhelpful baggage, including crippling conflicts of interest regarding current and past clients as well as a mindset and milieu ill-suited to being an aggressive enforcer of the law against those past private sector clients. Regrettably, those past clients, who often get sweetheart deals from the SEC, are almost always also future clients when those former defense lawyers go through the revolving door upon leaving the SEC, as has happened with all the recent Enforcement Directors and even the most recent past two SEC Chairs. 

“It is no surprise that Wall Street defense lawyers, regardless of current position, typically find their fellow defense lawyers’ arguments incredibly persuasive. After all, they are the very same arguments that the now-Director of Enforcement was making days and weeks before on behalf of very similar clients regarding very similar claims from the same agency.  That corporate-defense lawyer thinking has infected, undermined and, indeed, corrupted SEC enforcement for decades and must stop.   

“Today’s resignation of the SEC Director of Enforcement, who spent more than 20 years as a Wall Street defense lawyer and only a little more than three years as a prosecutor in the last millennium, should be viewed as an opportunity for the agency to select someone more appropriately qualified for the job, one with deep and broad experience in protecting the public interest without fear or favor. There are lots of highly qualified federal and state prosecutors, state securities regulators, and many others, including among the outstanding career professionals at the SEC itself, who would excel in that job. 

“That’s what the American people deserve, not yet another Wall Street defense lawyer with years, if not decades, of excusing and defending private sector clients accused of breaking the law, often repeatedly and egregiously. Now is the time to break with that disreputable pattern of hiring the wrong people hoping they will do the right job the American people need done.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.

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