How SEC’s Revolving Door Spins

Emails from former SEC commissioner Annette Nazareth show how ex-staffers wield influence.

It had been two days since U.S. lawmakers negotiated all night to finish rules that would reshape the business of Wall Street. The 20-hour session left legislators, aides, lobbyists and regulators exhausted. Almost no one had a grip on all the details.

Then Annette Nazareth stepped in. That Sunday morning, she e-mailed a dozen Securities and Exchange Commission officials about the bill that would become the 2,300-page Dodd-Frank Act.

Translating Washington

Officials routinely leave federal agencies, Congress and the White House to work for the industries they once supervised. While that path is well-trod and legal -- with some time restrictions -- it still provokes handwringing in Washington. Nazareth’s communications provide an inside look at what happens when the revolving door spins.

Schapiro Contacts

Nazareth has also attended meetings at the Federal Reserve and represents clients at the Commodity Futures Trading Commission, where she has met with Chairman Gary Gensler among other officials, according to public disclosures.

‘Nap Time’

Early in the Dodd-Frank debate, in November 2009, Nazareth forwarded a summary of a Senate proposal to Becker, who noted that the actual text ran to 1,100 pages. “More nap time for me,” he wrote.

Not ‘Door-Opener’

Nazareth isn’t a registered lobbyist -- a designation that is triggered under federal rules when a person spends 20 percent or more of his or her time engaged in “lobbying activities” for a client over a three-month period.

‘Economic Opportunities’

The SEC gets “top-notch, high-quality people because it’s fun, because it’s challenging, because it’s exciting and because of the economic opportunities after they leave,” said David Gourevitch, a former agency enforcement lawyer who is now in private practice in New York.

‘Very Peculiar’

The next month, on July 11, Nazareth e-mailed Becker to offer “just some Saturday morning thoughts” about the Treasury Department’s draft of the regulatory bill, noting that she found it “very peculiar in places, causing me to believe that it was not written by the SEC or fully vetted.”

Investor Advocate

The next morning Nazareth sent the copy of her firm’s bill summary to Becker, Schapiro and the four other SEC commissioners.

Other E-Mails

The e-mails include matters beyond Dodd-Frank.

‘Very Flattering’

In March 2010, Nazareth sent Becker a message on a Saturday afternoon that said she had “been getting pressure from headhunters” to consider taking a new job.

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