Washington lawyer Daniel M. Gallagher Jr., a former staff member at the Securities and Exchange Commission, is the leading candidate to fill a Republican slot as one of the agency’s five commissioners, sources familiar with the process said Thursday.
Gallagher would bring experience regulating and advising financial companies.
He would also extend a long track record of lawyers moving between the SEC and the law firm WilmerHale, a major force in securities law.
At the SEC, Gallagher held a senior position overseeing financial markets in the aftermath of the financial crisis.
Since leaving the SEC to rejoin WilmerHale in 2010, he has advised businesses such as investment banks, brokerages and hedge funds on how to comply with the law Congress passed last year in response to the crisis, said William R. McLucas, chairman of the law firm’s securities practice.
If he became a commissioner, Gallagher would be deeply involved in translating that law into detailed rules that will help determine its ultimate impact on Wall Street. He would also be in a position to influence federal enforcement in areas as diverse as insider trading and financial fraud.
McLucas, a former director of enforcement at the SEC, said he could not comment on the possibility of Gallagher being nominated for a seat on the commission.
But others said his candidacy is at an advanced stage.
The FBI has been conducting a background check on Gallagher, the sources said, speaking on condition of anonymity because President Obama has not yet named a nominee.
Until the president announces his choice, the situation could change, sources said. Whomever the president nominates would be subject to confirmation by the Senate.
Bloomberg News reported earlier that Obama might nominate Gallagher.
A White House spokeswoman neither confirmed nor denied Gallagher’s candidacy.
“The President will nominate someone to fill that role as quickly as possible, but we won’t speculate or comment on possible candidates before the President makes his decision,” spokeswoman Amy Brundage said by e-mail.
Gallagher did not return a call seeking comment.
He would replace Kathleen L. Casey, an appointee of President George W. Bush whose term expires in June. Casey previously worked for the Republican staff of the Senate Banking Committee and for Sen. Richard C. Shelby (R-Ala.), the committee’s top Republican.
One of the SEC’s Democrats, Commissioner Luis A. Aguilar, has stayed on since his term expired last year.
Gallagher is a 1994 graduate of Georgetown and a 1998 graduate of Catholic University of America’s Columbus School of Law.
He interned at the SEC years ago, McLucas said.
Gallagher worked at WilmerHale early in his career and then served as general counsel for a company called Fiserv Securities, according to his law firm biography.
He moved to the SEC in 2006 as an aide to Paul S. Atkins, then a Republican commissioner. He later became an adviser to Christopher Cox, who was a chairman of the commission under Bush.
Gallagher went on to fill a leadership role in the SEC’s division of trading and markets, helping to coordinate the agency’s response to the financial meltdown of 2008, including the bankruptcy of Lehman Brothers.
“I think having gone through that, you probably have somebody who’s got an enormous depth of experience in crisis management,” McLucas said.
Republican leaders, especially Senate Minority Leader Mitch McConnell of Kentucky, would ordinarily play an influential role in the president’s selection of a nominee for a Republican seat at the SEC. A spokesman for McConnell declined to comment.
As Gallagher’s career illustrates, there is a long tradition of securities lawyers moving between jobs at the SEC and jobs in law firms helping clients deal with issues related to the agency.
Former WilmerHale partners now at the SEC include Mark Cahn, the agency’s general counsel; Meredith Cross, director of the division of corporate finance; and Anne K. Small, who was recently named deputy general counsel.
Staff researcher Lucy Shackelford contributed to this report.