SEC Sets New Deputy Directors

The Securities and Exchange Commission announced two new deputy enforcement directors yesterday, as part of a plan to bolster the commission's top management.

Scott Friestad, an associate director of the division here, and George Curtis, who heads the agency's Denver regional office, will share responsibility of the SEC's enforcement investigations and report to division chief Linda Chatam Thomsen.

The division's chief counsel, Joan McKown, will also have increased responsibilities, SEC chairman Christopher Cox said yesterday.

The new directors replace Walter Ricciardi, who announced Monday that he is leaving to return to the private sector, and Peter Bresnan, who left for the private sector in December. Friestad has been with the SEC since 1995 and helped lead the lawsuit against 14 Wall Street individuals last year for insider trading on non-public information from UBS. Curtis joined the commission about 18 months ago after 30 years in private practice, and in that time his office has brought 49 SEC-approved enforcement actions.

Speaking to reporters following the naming of the new deputies, Cox said the enforcement division would "endeavor to cover the waterfront" in terms of investigating fraud.

"If men and women think of new ways to cheat investors, we want to make sure we're on the cutting edge," he said, noting that the enforcement division last year set the SEC's all-time record for corporate penalty cases and brought the second-highest number of enforcement actions in the agency's history. Last year, it brought a total of 655 enforcement actions, according to an SEC fact sheet released yesterday.

Meanwhile, the Senate Banking Committee held hearings yesterday on three nominees President Bush appointed to serve on the commission: securities law professor Troy Paredes, Atlanta attorney Luis Aguilar, and securities regulator Elisse Walter. The three would replace, respectively, Republican Paul Atkins and Democrats Roel Campos and Annette Nazareth. Atkins announced his intent to leave t last month, Campos left last year, and Nazareth stepped down in January.

The confirmations of all three individuals appear guaranteed, as each was nominated with the tacit approval of Senate Democrats, sources have said.

The nomination of Walter, who is the senior executive vice president of the regulatory arm of the Financial Industry Regulatory Authority, is noteworthy for the municipal market because she had a hand in writing the SEC's 1994 secondary market disclosure rules. Specifically, she was the principle author of an interpretive release the commission approved in March 1994 that lists steps issuers can take to avoid potential anti-fraud liability in connection with the public statements and reports that go out to the market.

The interpretive release suggested that issuers publish financial information, including audited financial statements and other financial and operating information, at least annually to an information repository. It also recommended timely reporting of 11 material events that reflect the creditworthiness of the issuer or obligor and the terms of its securities, such as material defaults, draws on reserves, adverse rating changes and receipt of an adverse tax opinion.

The Banking Committee has yet to schedule a vote for the nominees, but at press time yesterday committee leaders indicated that they would be approved.

"I support all the nominees, and hope we can get a vote on them as soon as possible," said Alabama Sen. Richard Shelby, the ranking Republican on the committee, which drew laughs from other senators on the panel.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER