Departure of Chicago director adds to vacancies in SEC leadership

WASHINGTON (Reuters) - The Securities and Exchange Commission announced on Monday that the director of its Chicago office was leaving after 27 years, marking the latest departure since Mary Jo White took the helm of the agency earlier this year.

Director Merri Jo Gillette will leave at the end of July to head up the litigation practice with the Chicago law firm Morgan Lewis & Bockius LLP.

The SEC's Chicago office is in one of the main U.S. nerve centers for the $648 trillion over-the-counter derivatives market, an area the SEC is preparing to more closely regulate under the 2010 Dodd-Frank reform law.

The current staff changes are a combination of White bringing in her own people, the usual turnover that comes with a leadership change, promotions and retirements.

Gillette's departure marks the latest in a series of high-profile SEC veterans to leave for the private sector this year, leaving another major position for White to fill.

In May, Bruce Karpati, head of the asset management group within the SEC's enforcement division, left to take a job at Prudential Financial Inc. White announced on Monday that she filled the position by promoting the unit's two deputies.

Most recently, Elaine Greenberg, head of the SEC's municipal securities specialty enforcement unit and a 25-plus year veteran, also said she would be leaving to return to the private sector.

The SEC also has two open director positions in its San Francisco and Boston regional offices, jobs that were vacated by Marc Fagel and David Bergers.

Since taking the job in April, White has found new directors for the enforcement and corporation finance divisions, the general counsel's office, the chief of staff, and examinations program, among other jobs.

Timothy Henseler was named permanent director of legislative affairs on Monday, an office in charge of managing the SEC's relationship with Capitol Hill. He had been the acting director.

But even as she has been filling the slots, a large number of SEC veterans have been leaving.

People familiar with the matter have said that by the end of July at least one other senior enforcement official was expected to leave under a program that offered SEC employees who are at least 50 years old and have at least 20 years experience a chance to retire early and retain some federal benefits.

Gillette is leaving the directorship at the Chicago office after helping bring several high-profile cases in connection with the financial crisis.

They included charges against Stifel, Nicolaus & Co and RBC Capital Markets alleging they mislead pension plans for Wisconsin school districts about the riskiness of complex securities.

Most recently, the Chicago office got an emergency court order to freeze the account of an overseas trader accused of reaping $3 million in illegal profits by trading ahead of the announcement that Shuanghui International Holdings would buy Smithfield Foods.

"I came to the agency in 1986. I was going to stay three or four years, and here I am all of these years later," Gillette said in an interview. "I was really bitten by the bug. I became passionate about the SEC's mission."

The SEC Chicago office's associate regional director for enforcement, Timothy Warren, will be the acting head until a replacement is named, Gillette said.

(Reporting by Sarah N. Lynch; Editing by Karey Van Hall and Lisa Shumaker)