Coming on the heels of Bernie Madoff's sentencing, the Securities and Exchange Commission (SEC) celebrated its 75th birthday party last night with a $250 per person dinner at the National Building Museum. According to Politico, the shindig was hosted and paid for by the SEC Historical Society, a 501(c)(3) nonprofit group that seeks to "contribute to the understanding of how the SEC has shaped and continues to shape U.S. and international capital markets." The menu sounded fantastic, but the donor list is less then appetizing. For instance, Politico lists Standard & Poors, the highly criticized credit rating agency, as one of the table sponsors.
To the SEC Historical Society's credit, their annual reports are quite transparent. Among the major donors listed in their 2008 report are T. Rowe Price Associates Foundation, Lehman Brothers, Goldman Sachs, Vanguard, and many law firms that represent clients against the SEC. Serving on their Board of Trustees in 2008 was the then-head of FINRA and current Chair of the SEC Mary Schapiro. Joining her on the Board are many private lawyers who started at the SEC, including the General Counsel of the Charles Schwab Corporation, the General Counsel of Duetsche Bank, and the Vice Chairman/Chief Legal Officer of a hedge fund valued at over $7 billion. Also listed on the Board is David M. Becker--formerly of Cleary Gottlieb Steen & Hamilton LLC--the newly appointed SEC general counsel and senior policy director.
In addition to raising concerns about the revolving door and conflicts of interest, POGO thinks this party is a perfect example of a regulatory agency getting too close to the industry it oversees (it also brings to mind a 2006 holiday party thrown by lobbyists and defense contractors for former Rep. Tom Davis). It's certainly a good way to keep the old boy network contact list up-to-date.
-- Eric Orenstein