Nazareth, herself a former SEC commissioner, represents the biggest banks and securities firms as a partner in the Washington office of Davis Polk & Wardwell. She attached an annotated copy of the measure to her June 27, 2010, e-mail, marking changes made during the wee hours. It could be an invaluable tool for an agency hard-pressed to analyze the bill on a tight deadline.
“In case you would find it helpful,” Nazareth wrote to the group, many of them former colleagues.
Two hours later, SEC Chairman Mary Schapiro responded: “Thanks. We have our work cut out for us.”
Dodd-Frank, which took effect in July 2010, would shape the SEC’s agenda for the next two years as it labored to write 100 regulations the law required. It also opened opportunities for Nazareth. With her connections and SEC experience, she emerged as the preeminent legal advocate for financial services firms as they sought to scale back the new rules.
With Nazareth on board, Davis Polk was hired as outside counsel on Dodd-Frank by the six largest U.S. banks and the Securities Industry and Financial Markets Association, the Wall Street trade group, according to the law firm’s Web site. The firm also performed work for foreign lenders, including Credit Suisse Group and Deutsche Bank.
Nazareth’s e-mails to Schapiro and then-SEC general counsel and senior policy director David Becker, obtained through a Freedom of Information Act request, show how lobbyists and lawyers draw on bonds they formed in government service to gain access for clients — and how they maintain those ties.
It’s “a real advantage” to send a familiar face into the agency, said Adam Pritchard, a University of Michigan law professor and former SEC lawyer. “If I’m a client, I’m very pleased. I’m willing to pay top dollar for that.”
Rather than making specific policy requests, Nazareth’s messages asked for meetings, offered her firm’s products and opined on the debate in Congress. She told Becker the prospect of a consumer finance protection agency made her “feel ill” and that she’d asked SIFMA, the Wall Street trade group, to “trash” a proposal for an investor advocacy office at the SEC.
Officials routinely leave federal agencies, Congress and the White House to work for the industries they once supervised. While that path is well-trod and legal — with some time restrictions — it still provokes handwringing in Washington. Nazareth’s communications provide an inside look at what happens when the revolving door spins.
Nazareth, 56, declined to discuss specific e-mails. She said that people like herself who have worked for both sides are valuable because they can “better translate to their clients” what the SEC is trying to achieve.