On Tuesday, President Obama announced his intent to nominate two new members to the U.S. Securities and Exchange Commission. While both of them must be confirmed by the Senate before they can start serving, the nominations have been awaited ever since former commissioners Luis Aguilar and Daniel Gallagher finished their five-year tenures at the SEC, whose mission is to protect investors and keep markets efficient.
Both of Obama’s nominees are women, and if they’re confirmed, there would be four women on a five-person board—the most female-heavy group of SEC commissioners ever. Since the SEC’s creation in 1934, only 11 women have served as commissioners. The first woman appointed to the SEC was Roberta Karmel, who was nominated by President Carter in 1977.
Also, both of Obama’s nominees are attorneys and academics. The first of Obama’s nominees is Lisa Fairfax, a law professor at George Washington University who’s up for Aguilar’s vacant Democratic seat. She teaches courses in corporate and securities law, has done research in corporate governance, and is a member of the SEC’s Investor Advisory Committee.
The second is Hester Peirce, a senior research fellow and director of the Financial Markets Working Group at George Mason University’s Mercatus Center. She is up for the seat of Gallagher, a Republican. She is a regular contributor to the website RealClearMarkets and co-edited a book analyzing the effectiveness of Dodd-Frank. She’s been a vocal critic of the shortcomings of post-crisis reforms.
Some have said that too many SEC nominees come from top financial firms (or the law firms that represent them), which would give them a bias toward traders. (And sometimes, former commissioners go on to make millions at the very firms they were tasked with regulating.) Researchers have warned that this “revolving door” hurts the SEC’s effectiveness, but these two nominees’ academic backgrounds might do something to dispel those accusations.
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