Bush to Tap Law Prof for SEC

[WSJ_law_blog]

This just in from the DJ news wire: Bush intends to nominate Washington University Law School professor Troy Paredes to the Securities and Exchange Commission, according to a senior administration official.

If confirmed, Paredes would replace Paul Atkins, a Republican commissioner who said Monday that he will step down once his successor is in place. Atkins is serving a five-year term that ends in June. Here’s a WSJ story from February which mentions Paredes as a possible replacement for Atkins.

Paredes (Berkeley/econ, 1992; Yale Law 1996) teaches securities law and has written about hedge funds and corporate governance.

According to the DJ wire report, by Judith Burns and Henry Pulizzi, Paredes’s supporters describe him as a “bright and thoughtful lawyer with a keen interest in policymaking.” In working papers in 2006 and 2007, Paredes took issue with a controversial SEC rule increasing oversight of hedge fund advisors. The 2004 rule, adopted despite opposition of Atkins and fellow Republican commissioner Cynthia Glassman, was overturned by a federal appeals court in 2006.

Politics may have been partly responsible for the SEC’s decision to regulate hedge fund managers, Paredes suggested. He wrote that it appears the SEC “did not want to get caught flat-footed and criticized again” as it had after accounting scandals at Enron and WorldCom.

“The SEC may have correctly believed that it had to do something when it came to hedge funds to fend off a Congress that may be anxious to fill any perceived regulatory void with new legislation,” wrote Paredes. Although regulators typically find themselves choosing between regulating and doing nothing, Paredes outlined a third option: recommend best practices and leave compliance up to the industry.

Before his teaching career, Paredes worked at the law firms of Irell & Manella, Steptoe & Johnson, and O’Melveny & Myers, focusing on leveraged buyouts, mergers and acquisitions and other financings.

Photo: Washington University School of Law Web Site