SEC's Lone Democrat to Leave
Wednesday, October 3, 2007
The Securities and Exchange Commission's lone Democrat yesterday confirmed that she would leave before next year's presidential election, raising the possibility that the investor protection agency could operate without representation from an opposing political party in the final months of the Bush administration.
Annette L. Nazareth, 51, has spent nearly a decade at the SEC, where she has directed a unit that polices stock markets before becoming one of five commissioners who steer overall operations.
Word of Nazareth's exit comes two weeks after the agency's longest-serving Democrat, Roel C. Campos, resigned to accept a partnership in a Washington law firm. Commissioners have sweeping authority to impose new rules on publicly traded businesses. They also vote to approve lawsuits filed against people and companies accused of violating securities laws.
The commission is made up of two Democrats and two Republicans, plus a chairman from the president's political party, and all must be approved by the White House and the full Senate. Unless Senate leaders accelerate in naming candidates to fill the two Democratic slots, former agency officials said the panel's work on sensitive enforcement cases and rulemaking proposals could be open to claims of partisanship.
Jim Manley, a spokesman for Senate Majority Leader Harry M. Reid (D-Nev.), said that lawmakers were "actively vetting candidates for both positions" and would move "as quickly as possible."
Nazareth said she hoped a replacement could be found in time for her departure but noted that "the political process is beyond my control." She has yet to explore private-sector options but said in an interview that she wanted to stay in the District because her children are settled in area schools.
During her long tenure as a regulator, Nazareth helped guide the markets to reopen after the Sept. 11, 2001, terrorist attacks, encouraged electronic stock trading and pushed the world's largest investment banks to voluntarily share more information about their debt exposure in order to prevent a crisis that could cascade across the economy.
Earlier in her career, Nazareth worked as an executive at Smith Barney and Lehman Brothers, a background that helped her develop an approach that Sen. Charles E. Schumer (D-N.Y.), characterized in a statement yesterday as "pro-business and pro-regulation."
"In her nine years at the SEC, Annette really demonstrated her detailed knowledge and understanding of the capital markets, a real passion for investor protection, and a pragmatic, problem-solver's approach to every issue," said Mary L. Schapiro, chief executive of the Financial Industry Regulatory Authority, which oversees more than 5,000 brokerage firms.
Nazareth "helped to create the balance which is absolutely necessary for the commission's investor protection mission," said Columbia University law professor Harvey Goldschmid, a Democrat who served at the SEC until 2005.