Steering the SEC

Norm Champ, Kirkland & Ellis partner, spent more than four years at the Securities and Exchange Commission as deputy director of the Office of Compliance Inspections and Examination and director of the investment management division. He left in 2015 and has written a book detailing his experience at the agency.

What was the biggest challenge for you at the regulator?
We needed to make significant changes at the agency in the wake of the failure to detect the [Bernie] Madoff and [Allen] Stanford Ponzi schemes. Change is not easy in government but we had the backing of SEC chair Mary Schapiro so we were able to accomplish a great deal, such as bringing in more experts and automating the exam reports so they were accessible to examiners all across the country.

How did your experience differ from expectations?

Perhaps the biggest surprise was the lack of a manual setting forth the policies and procedures of the exam program. There were procedures for specific exam tasks but not an overall manual for how the program operated. I count as great progress that we got a manual in place for the exam program in 2012 and for the investment management division a couple of years later.

What advice would you give someone joining the agency from private practice?

You need to work with the existing structure to have any hope of making change. In our case we worked closely with the public employee union representing SEC employees and that helped us make major changes. Without the union’s constructive co-operation I don’t think change would have been possible.

Can you give a juicy tidbit you reveal in the book?

SEC staff worked tirelessly behind the scenes to prevent the collapse of a clearing broker called Penson and avoided what would have been the largest proceeding ever to wind up a broker. This episode had never been made public until it was discussed in the book.

Going Public: My Adventures Inside the SEC and How to Prevent the Next Devastating Crisis
was published on March 17