J.P. Morgan Hires SEC's Former Top Cop
Wednesday, December 13, 2006
Stephen M. Cutler, a former securities watchdog who presided over the investigations of Enron, Tyco and WorldCom, will become general counsel and head of worldwide compliance at J.P. Morgan Chase early next year, bank officials said yesterday.
For the past 18 months, Cutler has represented companies and individuals in probes into stock options practices and other issues as a partner at the Washington law firm WilmerHale. But he is best known for his tenure as enforcement chief at the Securities and Exchange Commission from 2001 to 2005, years that spanned the unraveling of widespread accounting fraud and Wall Street research and trading scandals.
Cutler, 45, will join J.P. Morgan Chase in February after he relocates from the Washington area with his wife and two young sons. In a telephone interview, he expressed a measure of regret at leaving Wilmer, which has one of the nation's top securities-law practices. Cutler, a graduate of Yale Law School, spent more than a decade at the firm during the course of his career.
In his new role, Cutler will be responsible for ensuring that the bank's 172,000 employees in more than 50 countries comply with the law, and he will have an opportunity to shape policies that encourage following the rules. He also will sit on the operating committee, reporting directly to chief executive James Dimon.
"You know, opportunities like this don't come around every day, with companies like this," Cutler said. "You always hope as a lawyer in house to be able to prevent problems."
Cutler replaces banking industry veteran Joan Guggenheimer, who died of cancer this year. J.P. Morgan Chase, considered the third-largest financial institution in the country, did not disclose his compensation package.
Separately, WilmerHale partner Charles E. Davidow said yesterday that he would leave the firm after 26 years to start a securities enforcement unit in the District office of law firm Paul, Weiss, Rifkind, Wharton & Garrison. Davidow, 52, performed the difficult work in internal investigations into wrongdoing at Enron, WorldCom, Delphi and Cablevision in recent years but said the prospect of building a unit from scratch was too "exciting" to pass up.
William R. McLucas, a former SEC official who is co-chairman of the Wilmer securities division, said the two departures were the result of once-in-a lifetime opportunities. "The depth and breadth of this group is quite substantial," he said. "It's the price you pay for having a practice group that most of the firms out there would love to duplicate."