Victory for SEC's Revolving Door
Critics have always reigned supreme. The accusation is that the revolving door has resulted in leniency by the regulatory agency, as former SEC attorneys may exert a degree of influence over their erstwhile colleagues. Additionally, prosecutors contemplating a transition to a law firm may attempt to curry favor with a prospective employer.
These assumptions seem like common sense to any savvy business pro. But a new study shows that the long-held suspicion that there is hanky-panky in this revolving door game is just plain wrong.
According to the study, the revolving door has not resulted in enforcement leniency. Rather, as The New York Times has noted, as “financial markets and investment techniques have become more complicated, the SEC has tried to hire more specialists with work experience at Wall Street firms.”
What all of this suggests to me is that greater outcomes are achieved by people with well-rounded experience. Also, transparency, trust and integrity, values we hope to see championed among people in government and business, at least this time, were.
The new study (which can be found here) collected data on the career paths of 336 SEC lawyers and their involvement in 284 SEC enforcement actions from 1990 through 2007.
The study was authored by researchers at Emory University, Rutgers, the University of Washington and Nanyang Technological University in Singapore.