Alex Oh, the first Asian American woman to head the agency’s enforcement division, has resigned her position at the Securities and Exchange Commission for personal reasons.
Melissa Hodgman will return to the role of acting director of the Division of Enforcement.
Oh’s surprise move, announced just a week after she got the job is an early and significant setback in SEC Chair Gary Gensler’s tenure running the Wall Street regulator, but it is a chance to rid the agency of staff that has ethical conflicts that could reduce pressure on corporate criminals.
“A development arose this week in one of the cases on which I worked while still in private law practice,” Oh said in an emailed resignation to Gensler that was reviewed by Bloomberg. “I have reached the conclusion that I cannot address this development without it becoming an unwelcome distraction.”
Before joining the SEC, Oh was a partner at Paul, Weiss, Rifkind, Wharton & Garrison, where her corporate clients included Exxon Mobil.
In that role she was defending the oil company against two-decade-old allegations that it supported killings and tortures in Indonesia, and her conduct during the litigation was recently called into question by the judge overseeing the case, U.S. District Court Judge Royce Lamberth.
Progressives are eager to see the SEC step up to challenge business because they’re not confident that Democrats in Congress will be able to do that.
Gensler is a former Goldman Sachs partner-turned-Wall Street watchdog, who infuriated bankers when he served in the Obama administration by curbing trading activities that had fueled the 2008 global financial crisis.
Changing the direction of the SEC is a major priority for progressive Democrats because the independent agency has sweeping powers to regulate corporate America and limit the influence of big business.
“Gary Gensler was perceived by a lot of people as achieving the sweet spot of having worked on Wall Street but also having a proven track record of holding big corporations accountable,” said Adam Green, co-founder of the Progressive Change Campaign Committee. “That’s why it was so surprising that his instinct was to appoint someone as the main enforcement person who had no track record of holding big corporations accountable and literally had just come off representing big corporations like ExxonMobil.”
Hodgman served as the Enforcement Division’s Acting Director from January 2021, through April 2021. Before that, she was the Associate Director in the SEC’s Home Office since October 2016.
Hodgman began working in the Enforcement Division in 2008 as a staff attorney. She joined the Market Abuse Unit in 2010 and was promoted to Assistant Director in 2012. She received the Ellen B. Ross Award, the 2010 SEC Chairman’s Award, the 2017 Arthur F. Mathews Award, and the 2020 Chairman’s Award for Excellence with the SEC’s Employee Affinity Groups, as well as a number of Division Director Awards.
Hodgman earned her Master of Laws with distinction in securities and financial regulation in 2007 from Georgetown University Law Center, her law degree with high honors from Georgetown University Law Center in 1994, and her Bachelor of Science degree from Georgetown University School of Foreign Service in 1990. Before joining the SEC staff, she worked as an associate at Milbank, Tweed, Hadley & McCloy in Washington, D.C.
The enforcement chief is one of the most distinguished jobs at the SEC, with the director leading a group of 1,300 officials who investigate violations of securities laws and sanction individuals and firms for misconduct.
Oh’s departure represents a headache for Gensler, but progressive advocacy groups seized on it to push him to appoint someone with fewer ties to firms the SEC regulates.
The practice of the agency hiring corporate defense attorneys has long been a problem with progressive lawmakers including Elizabeth Warren, the Massachusetts senator and vocal financial industry critic.
“The SEC has failed the American people by repeatedly selecting Wall Street defense lawyers as directors of enforcement,” said Dennis Kelleher, president and chief executive officer of Better Markets. Oh’s resignation “is an opportunity to break the SEC’s corrupting practice of hiring Wall Street defense lawyers,” the group said.
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