SEC Taps Two for Munis; Status Issues Remain

WASHINGTON — The Securities and Exchange Commission has hired two attorney-fellows to double the staff in its office of municipal securities, but efforts to comply with a congressional mandate to heighten the office’s stature so it directly reports to the chairman is being stymied by short-term budget stopgaps, sources said.

The budget problems stem from a series of continuing resolutions that have extended prior-year budget authorizations but do not explicitly allow the SEC to fulfill its mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in July.

The current CR, which funds agencies at fiscal year 2010 levels, was set to expire Friday but the House has passed an extension of it through Dec. 18. The Senate must take action on the measure or Congress must pass an omnibus appropriations bill for fiscal 2011.

In addition to holding up the makeover of the muni office, the series of continuing resolutions have delayed the SEC from staffing five other new offices, including one to oversee credit rating agencies, according to the commission’s website.

“CRs always freeze action,” said Paul Light, professor of public service at New York University. “Agencies are like deer in the headlights as they await final determination of their budgets.”

Currently, the municipal office is housed within the SEC’s division of trading and markets and includes Martha Mahan Haines, its chief, as well as senior special counsel Mary Simpkins.

The agency has hired a headhunter to help it find candidates to serve as director of the new office, but has been unable to publicly post the position because of the stopgaps.

While congressional lawmakers are ­reportedly ­considering an omnibus spending ­package that could include adjustments to the SEC and other agency funding, details of it would not be available until next week.

Though omnibus spending legislation allows for Congress to vote on all 13 appropriations bills at once, it could increase potential for mischief, Light said, because it often runs several thousand pages long “and nobody has time to actually carefully inspect them.”

Meanwhile, the new SEC muni attorney-fellows are John McWilliams 3d, formerly of Livermore, Freeman & McWilliams PA in Jacksonville, Fla., and Dave Sanchez, formerly of Financial Security Assurance in San Francisco. Both will work at the commission for two-year terms, which the SEC can renew for two more years.

McWilliams, 66, has more than 35 years experience as a bond and disclosure counsel, working on numerous transactions for hospitals, governments, airports and other issuers.

He also worked at the commission early in his career, as an enforcement attorney in its New York City office during the early 1970s.

McWilliams practiced for five years at Mudge Rose Guthrie Alexander & Ferdon before moving to Jacksonville in 1977 to join Freeman Richardson Watson & Kelly PA.

In 1988, that firm merged with Squire, Sanders & Dempsey LLP and for 10 years McWilliams served as practice-area coordinator for its Jacksonville and Miami offices, until he left in 1998 for the Livermore firm.

Sanchez, 43, has broad experience as an attorney practicing at law firms, for the city of San Francisco and for FSA.

He worked as an associate at Orrick Herrington & Sutcliffe LLP after graduating from Harvard Law School in 1992. In 1998, he left to work as counsel for San Francisco for three years. From 2001 to 2004 he worked at Sidley Austin LLP, when he assisted the firm in its role as counsel to the state of California and its disclosure counsel practice. 

At Financial Security Assurance between 2004 and 2009, Sanchez worked on a broad range of credits, as the bond insurer’s San Francisco office was responsible for the western half of the country and health care nationally.

Before joining the SEC, Sanchez spent most of the year traveling in South ­America, visiting all but two countries on the continent. He began working at the SEC in September. McWilliams started last week.

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