Morgan Stanley has hired its second chief compliance officer in as many years, and Davis Polk is losing the head of its Washington, D.C. office.
Raul Yanes, who had headed Davis Polk & Wardwell’s Washington D.C. office and its white collar practice, will replace Billy Fenrich at Morgan Stanley as chief compliance officer, starting in June. Fenrich, who is also a former Davis Polk partner, had only taken over the position in March 2016 and is leaving to join Greenwich-based hedge fund, AQR Capital. Reuters earlier reported the news.
Morgan Stanley has faced a number of compliance issues in recent years: In January, the Securities and Exchange Commission announced its wealth management division agreed to pay $13 million to settle charges it overbilled clients due to billing system errors; in February, the same division agreed to pay $8 million in another SEC settlement because the agency said it failed to notify several hundred clients about the risks associated with a particular type of investment.
The changes at Morgan Stanley come as some banks look to cut compliance positions for the first time since the financial crisis, Bloomberg reported in March . The article noted the Royal Bank of Scotland planned to cut as many as 2,000 compliance-related jobs and that UBS Group AG is using technology to automate certain positions; it cited a study that found banks have paid $321 billion in compliance related fines since 2008.
Wesley McDade, a spokesman at Morgan Stanley said he will not join the bank until June and Yanes declined to comment. AQR Capital said Fenrich will not join until this summer and is not available for comment.
Yanes is a litigator, according to his bio on the Davis Polk’s website, which had already been taken down but was cached by Google.
In recent years, Yanes’ practice has had a heavy focus on clients under investigation for Foreign Corrupt Practices Act violations, including “a senior Walmart official” in Mexico, and other executives in Japan and Asia, according to the cached bio.
He also spent six years away from the firm during President George W. Bush’s tenure, acting as associate counsel to Bush from 2003 to 2005; a senior counsel to then-Attorney General Alberto Gonzalez in 2005; general counsel to the Office of Budget and Management from 2005 to 2006; staff secretary and assistant to President Bush from 2006 to 2009. Then, he rejoined Davis Polk where he had been a partner.
Morgan Stanley has long relied on Davis Polk as a pipeline for its in-house legal department, and Fenrich was also a partner at the firm beginning in 2005, representing the pharmaceutical company AstraZeneca in securities matters as other companies, according to Bloomberg. He joined the hedge fund Pennstate Capital as chief operating officer in 2010 and later became general counsel 2010, according to Bloomberg Law .
Two of Morgan Stanley’s former chief legal officers, Gary Lynch and Eric Grossman, were also Davis Polk alumni. Grossman will be interviewed by Megan Murphy of Bloomberg Businessweek at the 2017 Big Law Business Summit in New York .
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