Readers may recall that we took notice of the fact that after taking a uncharacteristically forceful stand against private equity abuses last May, the SEC’s Director of the Office of Compliance Inspections and Examinations Andrew Bowden began taking a far more conciliatory stand towards the industry starting in August. We exposed his remarks at a private equity conference at Stanford Law School in which he repeatedly praised the industry as “the greatest,” depicted abuses including widespread embezzlement as “some misconduct,” and lightheartedly told the audience he’d urged his son to work in the private equity industry. Almost immediately, Bill Black called for Bowden’s resignation. That story was picked up by the International Business Times, Truthout, Bill Moyers, Bloomberg, the Los Angeles Times, and Matt Taibbi. Credo had also been planning to launch a campaign this week, “Tell SEC Chairwoman: Punish lawbreaking, or fire industry-friendly regulator.”
From the SEC this morning:
The Securities and Exchange Commission today announced that Andrew Bowden, Director of the Office of Compliance Inspections and Examinations (OCIE), will leave the agency at the end of April to return to the private sector.
Mr. Bowden joined the SEC in November 2011, serving as OCIE’s National Associate for the Investment Adviser/Investment Company examination program. He was named Deputy Director of OCIE in September 2012 and became the Director of OCIE in June 2013.
“Drew has served as a thoughtful, creative, and dedicated advocate for investors, OCIE, and the Commission,” said SEC Chair Mary Jo White. “Under his leadership, OCIE has effectively engaged with investors and the industry to promote compliance, worked to detect and prevent fraud, and advised the Commission on policy issues and developing risks.”
“I am extremely grateful to have had the opportunity to work with Chair White, the Commission, and with such dedicated and talented colleagues in OCIE,” said Mr. Bowden. “The work they do is extremely important. Each day they come to work to protect investors and the integrity of our complex and adaptive capital markets.”
I would like to thank all of writers and members of the press who called attention to and criticized Bowden’s fawning, which undermined his credibility and that of the SEC, and to Naked Capitalism readers who called and wrote their Congressmen and Mary Jo White. Even with regulatory capture and the revolving door recognized as common if not pervasive, some conduct is still recognized as being outside the pale.
I would also like to thank those who recognized our role (and are tweaking those who don’t), such as:
“@ReutersLegal: Top #SEC compliance chief to leave agency this mo http://t.co/OajO1g2vFI” Just say it's Bowden. Congrats @nakedcapitalism
— Francine McKenna (@retheauditors) April 7, 2015
@retheauditors @ReutersLegal @nakedcapitalism And Reuters doesn't mention why or NC's work. Of course.
— Matt Stoller (@matthewstoller) April 7, 2015
And thanks again to the NC community! Let’s hope the SEC got the message and realizes it needs to be tough on enforcement, particularly in private equity.
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I have to say that I would much prefer he stay and actually be forced to regulate rather than this “briar patch” punishment. This is just more revolving door window dressing.
I would agree. The man had been thoroughly shamed and knew he was under our microscope. He either had to step up and kick some bankster butt, or leave. He chose the latter. Unless they hire Bill Black, I would expect his successor to be no better – and likely worse.
i disagree. a notice has been served that sycophancy won’t be tolerated. hopefully, he will be replaced with someone not compromised who will take this lesson to heart. if not…we’ll need to campaign to replace them, too.
haha, “briar patch punishment”. les mots justes!
Yes I agree.
Seems to me we need to start calling out the members of Congress responsible for SEC oversight. I know its an uphill battle as they are largely wholly owned subsidiaries of Wall Street.
That said, congrats on a victory. Let’s hope it isn’t pyrrhic.
No way. A fawning little sycophant like that doing the regulating? Now the only question is which PE firm or law firm offers him a partnership.
Let’s give financial regulation to the United States Air Force. Last I checked the bad guys were still afraid of them, which is more than you can say for most of the financial regulators.
I like your sense of humor. I can’t get the image of an armed Predator drone buzzing over Wall Street out of my head. That would be one heck of a way to deliver your next Wells Notice.
I guess this means that Bowden will go through the revolving door sooner rather than later.
My bet is that it was not what Bowden said that drew heat at home office, but the fact that he said it out loud in front of witnesses.
Congrats! that’s one for the skunk party
Oh, to spend more time with his family.
So naming and shaming does still work!
Thanks for breaking this story, and thanks to everyone who understood the significance of it and followed it up with appropriately outraged reporting.
The suddenness of his departure is encouraging, although the bench at the SEC his replacement will be selected from not so much. The staff a tier below him are alarmingly lightweight and have been parroting Bowden’s line.
Mary Jo White’s choice of successor will be critical. I’m sure we’ll be keeping close watch.
Savor the schadenfreude.
Is there a one year limitation on the type of private sector work that he is allowed to perform? Or will he be allowed to immediately try to influence SEC actions on behalf of his post-April employer or clients? I found this at the Federal Register web site, but I don’t know whether it applies to his specific job at the SEC or not.
https://www.federalregister.gov/articles/2014/01/02/2013-30668/post-employment-conflict-of-interest-regulations-exempted-senior-employee-positions
Dealbreaker spins it as:
But the SEC’s Eliot Ness of venture capital has apparently grown tired of wearing the white hat.
At this point it would be easy to make a snarky accusation that Bowden is cashing in and will “get that cheddar” as head of compliance at some billion dollar fund , but we’ll abstain because he’s kinda done with suing people. It actually turns out that he’s got virtually nothing left do at the SEC.
http://dealbreaker.com/2015/04/secs-top-private-equity-cop-is-over-it/
Ha!
For a more balanced take, heres the International Business Times coverage
http://www.ibtimes.com/sec-inspections-chief-andrew-bowden-plans-return-private-sector-1872763
Dealbook’s ‘virtually nothing left to do’ snark conflicts with the SEC’s assessment of what is actually left to do.
https://www.sec.gov/spotlight/investor-advisory-committee-2012/investment-adviser-examinations-recommendation-2013.pdf
The President’s FY 2014 Budget request seeks appropriations that would permit the SEC to hire
250 additional examiners in FY 2014. Chair White has characterized this hiring as “vital” and as
the first step in a “multi-year effort to increase coverage by [the SEC’s] examination program.”2
However, Congress does not appear likely to fund this request. Indeed, the FY 2014 SEC budget
approved by a House Appropriations Subcommittee on July 10, 2013 would provide the SEC with
$303 million less than the President’s request.3
Such a funding level cannot support the
necessary improvements to the SEC adviser examination and oversight programs without
sacrificing other equally important Commission activities.
So it looks like Bowden’s sudden departure leaves MJ White with a gaping hole at the head of a ‘vital’ key objective in the Examinations division.
Fortunately it gives her the chance to hire Bill Black ;)
The Edge
I don’t know why anybody would want all that PE money. What a bore, flying around going to meetings all the time. Making speeches about money. Going to meetings about money. Going to meetings about the meetings you had about money. Then making speeches about the meetings that you had about the meetings about money.
It never stops. And it never starts. It goes from Money to Money to Money. It moves but it goes nowhere.
Why don’t they stop after a few million dollars? You can surf Youtube and go to a café, stare out a window, ride a bus, look at faces on the street, look at trees and the sky. That’s a lot more interesting than money. And it goes. It goes everywhere. It even goes all the way to the edge of the universe. Then it goes beyond even that. How can you compare that with going to meetings about money? It makes no sense to me, I guess that’s why I don’t have 669 million dollars and never will. But I’d take a few million and not feel too guilty — as long as it came from a 10-bagger.
“Foolery, Sir, does indeed walk about this orb; and like the sun, it shines everywhere”
Lanny Breuer executed a (what Professor Black termed) career limiting gesture in a famous Frontline interview.
Has enforcement gotten any better since his departure?
Ed DeMarco was replaced for ostensibly bottleknecking the housing industry, we’re now right back to square one with lowered lending requirements.
Unenlightened short term interests appear to prevail more times than not.
Good job Yves!!!
I, for one, do not see this as a “win.”
Bowden appears to have been bought-off, just like Holder and Breuer in the field of law and justice. I wonder if Bowden was already soliciting offers after his tough talk a year ago. How big a payday will this be? One of his acquaintances reads this blog; perhaps they might weigh in.
A “win” would have been the SEC forcefully walking-back Bowden’s words at Stanford Law (one of the Seats of Greed in America) and MJ White taking tough action on enforcement. She can talk all she wants, safe in the knowledge that a GOP Congress bought and paid-for by PE isn’t going to give her a dime.
Yes, it is as if Bowden is now being rewarded for his (bad) work at the SEC with a really good money-making opportunity in the private sector. There should be a criminal penalty for what he did not accomplish and maybe a little “time served.”
uncle scam is VERY interested in spying on YOU, the little people, and to that end expends GINORMOUS amounts of money and human resources. phone convoc, texts, emails, cameras… you know the drill.
but notice, who’s watching uncle scam? while the fourth estate ostensibly is, we now know with revelations of regulatory capture (see: Carmen Segarra’s story; it’s incredible) that icons of finance in the press, notably, cnbc, are lax at best in reporting on stories that could help bust the rampant criminal activity running wild.
there’s also justice, fairness. uncle scam is very concerned with pot smokers, the mentally infirm, the poor, not only regulating them to death, but zealously enforcing and prosecuting them. meanwhile, the biggest criminals in history are rampaging, stuffed to the gills with welfare money, ever hungry for more. and boy, are they getting BUSY.
EM08 – the econ meltdown of 2008 — marks a line in the sand, not just for america, but the world. but next year marks another milestone; the richest 1% will own over half the wealth in the world. currently, they’re at about 47%, as if that isn’t reason enough to whip out the guillotines.
history, the mother of all other subjects, begs us to look back. unfortunately, it’s the most ignored subject, and we will continue to play out churchill’s remarks: “Americans always make the right choice. After they’ve exhausted every other possibility.”