By Dave Michaels, Bloomberg News
President Barack Obama plans to name Democrat Lisa Fairfax and Republican Hester Peirce to serve on the U.S. Securities and Exchange Commission, the White House said in statements on Tuesday.
Fairfax, a George Washington University law professor, would take a seat that liberal groups have said should go to a reform proponent who is skeptical of Wall Street. Peirce, a senior research fellow at George Mason University, would become the third of the SEC’s five commissioners to have worked as a policy aide on the Senate Banking Committee.
Fairfax and Peirce, whose nominations will be subject to Senate confirmation, would join an agency that has struggled to finish the regulatory overhaul required by the 2010 Dodd-Frank Act. Progress on rules and enforcement cases has been slowed by partisan fights and Chair Mary Jo White’s inability to corral consensus.
“I want to congratulate Lisa Fairfax and Hester Peirce on their nominations to be SEC commissioners,” White said in a statement. “As their confirmation process moves forward, the commission remains focused on its critical work to protect America’s investors and our markets.”
Fairfax’s nomination comes after several months during which progressive groups and labor unions lobbied against candidates they claimed were too close to Wall Street. The groups attacked corporate attorney Keir Gumbs, a former SEC lawyer and partner at Covington & Burling, after the White House met with him about the post. His clients have included corporations as well as large investor groups such as the Council of Institutional Investors.
Fairfax would replace Luis Aguilar, the SEC’s longest- serving member, who has consistently backed stricter rules and tougher terms for enforcement settlements. Outside of her research focused on the duties of directors and rights of shareholders, Fairfax’s views on the range of activities regulated by the SEC are unknown.
“I would expect both nominations to be very favorably viewed by both the Banking Committee and the Senate overall,” said Tyler Gellasch, a former Democratic Senate aide who leads Healthy Markets, a non-profit group that advocates for equity market structure changes.
Peirce is a critic of the regulatory expansion passed in the wake of the 2008 financial crisis. She edited the 2012 book “Dodd-Frank: What It Does and Why It’s Flawed.” She began her legal career at the SEC as a staff attorney in its investment management division and also worked for former Commissioner Paul Atkins. She would replace Daniel Gallagher, a Republican who left the agency earlier this month.
Both nominees will testify before the Senate Banking Committee before the full chamber votes on their nominations.
Torrie Matous, a spokeswoman for Senate Banking Committee Chairman Richard Shelby, said the panel hasn’t yet set a date for a hearing.
“I look forward to hearing the nominees’ views on how the SEC can improve investor protections and continue to preserve and strengthen the policies that have stabilized the financial system and helped our economy bounce back from the crisis,” said Senator Sherrod Brown, the top ranking Democrat on the banking panel. “Both SEC nominees -- and the 11 other nominations that have been pending before the Banking Committee for months -- deserve thorough, fair, and swift consideration.”
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