SEC’s Donohue to step down

Andrew Donohue plans to leave the US Securities and Exchange Commission in November after serving more than four years as its director of the division of investment management, according to an SEC news release. It is unclear what his next move will be.

Donohue joined the SEC in May 2006, appointed by then-chairman Christopher Cox, as its director of the division of investment management.

During his tenure, Donohue helped develop significant regulations including policies to increase investment advisor custody controls and to curtail investment advisor pay-to-play abuses. The SEC, along with New York Attorney General Andrew Cuomo, engaged in a multi-year investigation of pay-to-play practices at the New York State Common Retirement Fund in which political operatives allegedly strong-armed investment firms into paying sham finder’s fees in exchange for commitments from the pension.

Most recently under Donohue’s leadership, the SEC in June banned unregistered placement agents from soliciting commitments from public institutions on behalf of private investment firms. The 30 June ruling was significantly scaled back from its initial form, in which firms would have been barred from hiring any placement agents to interact with public pensions.

“[Donohue] has been an effective leader and investor advocate during his tenure at the Commission. His vast knowledge of mutual funds and the investment advisory landscape has been invaluable in advancing several vital regulatory initiatives,” said SEC Chairman Mary Schapiro, in a statement.

Before joining the SEC, Donohue served as global general counsel for Merrill Lynch Investment Managers where he oversaw the firm's legal and regulatory compliance functions for assets in private equity funds, mutual funds, fixed income funds, hedge funds, managed futures, and exchange funds. He was also chairman of the firm's global risk oversight committee.

Prior to his service at Merrill Lynch, Donohue spent more than a decade as executive vice president and general counsel for mutual fund company, Oppenheimer Funds. Previously, he was a corporate and securities law partner with the firm of Kraft & McManimon, a multi-practice firm for private and government clients based in New Jersey.