The resignation of Stanley Sporkin as director of enforcement for the Securities and Exchange Commission gives the Reagan administration's new SEC chairman a chance to send a quick, clear signal to investors and corporate America.
John S. R. Shad, who takes over as the head of the commission in May, will appoint the successor to Sporkin -- a man both admired and feared for the vigorous enforcement that he made a hallmark of the SEC.
Shad's choice, in consultation with the other members of the SEC, "really depends on the will and commitment of the commission to back the enforcement program," said Edward D. Herlihy, a former assistant director in the SEC's enforcement division who is now with a New York law firm. "That will be a sign."
"The Reagan administration ought to bend over backwards" to find a successor who will carry on the tradition established by Sporkin, said an aide to Sen. William Proxmire (D-Wis.), who has monitored the commission's activities from the Senate Banking Committee. "It would certainly be unfortunate if he were replaced by anyone less vigorous than Stan."
The commission that will make that decision is an unknown commodity right now. The last member appointed to the five-member board before Shad is Barbara S. Thomas, a Carter appointee who has not yet carved out a clear role in the short time she has served. Another commissioner, Stephen J. Friedman, will step down soon when his term ends, and his successor is unknown. And Shad is keeping many of his views about the SEC to himself until he joins the agency.
Shad said he had not yet met with the SEC's enforcement staff to talk about a successor to Sporkin. SEC Commissioners Philip A. Loomis Jr. and John R. Evans both said yesterday that Sporkin's achievements included building a great deal of depth in the enforcement division, which they characterized as full of talented, resourceful people.
Theodore A. Levine, associate director for market surveillance, program management and options in the Division of Enforcement, was one name already being mentioned yesterday as a possible successor to Sporkin.
"I believe in effective enforcement," said Shad. "The SEC has been widely reported to have the most effective enforcement in government, but some have felt that on occasion the enforcement division has been heavy-handed and overzealous," he said. Shad said he was reserving judgment on that but "if it has, this is not desirable," he said.
Shad said he saw it as his duty to assess how effective enforcement has been and compare it with costs.
Commissioners, enforcement division staff and others said yesterday that Sporkin has built a structure in the division that should survive his departure and ensure continuing strong enforcement. Sporkin did not run a one-man shop, totally dependent on his presence, although he provided strong leadership, they said.