By Sarah N. Lynch
WASHINGTON Jan 6 The U.S. Securities and
Exchange Commission's chief economist, who helped turn around
the agency's struggling think-tank unit and pushed for more
economic analysis in rulemaking, plans to leave the SEC this
spring, according to an internal letter seen by Reuters.
Craig Lewis, who took over the helm of what is now called
the SEC's Division of Economic and Risk Analysis in May 2011,
told his colleagues in a Dec. 20 letter that he plans to return
to his academic position at Vanderbilt University in the spring.
In the letter, he asked his colleagues to suggest possible
replacements, saying the ideal candidate would have held a
position at a "leading academic institution."
"The hope is to fill the position no later than the summer
of 2014, but we would like to find someone who might be willing
to start sooner than that," Lewis wrote.
SEC spokesman John Nester declined immediate comment.
Lewis did not immediately respond to an e-mail seeking
Lewis' internal announcement comes at a critical time for
the SEC, which is still struggling to complete writing all the
rules required by the 2010 Dodd-Frank Wall Street reform law.
The role Lewis' division plays in the agency's rulemaking
has grown in importance in recent years, as industry groups have
won legal challenges to some SEC rules on the grounds that the
agency failed to conduct proper economic analyses.
Lewis started his career at the SEC as a visiting academic
fellow from Vanderbilt in 2010.
The unit, then known as the Division of Risk, Strategy and
Financial Innovation, was created after the agency failed to
detect Bernard Madoff's massive fraud and the financial crisis.
Critics said the new division's mission was not clearly
defined, lacked strong leadership and suffered from low morale
and high staff turnover.
After former division director Henry Hu left to return to
academia, the agency tapped Lewis to replace him and become
In an agency historically staffed mostly with lawyers, Lewis
has pushed to add more economists and boost the division's role
He helped to develop new guidelines in 2012 that called for
the SEC to rely more on economists during rulemaking and to
provide stronger economic justifications for final rules.
That year, his division was widely viewed as having helped
bolster the economic analysis for several high-profile and
controversial rules, from regulations governing over-the-counter
derivatives to money market mutual funds.
In March 2012, the SEC made the unusual move of releasing an
economic study on derivatives to gauge the industry's reaction,
prior to adopting final rules. The SEC has not faced a legal
challenge to those rules.
In the fall of 2012, his division also provided the SEC's
deeply divided panel of commissioners more analysis to justify
new rules to reduce the risk of investor runs on money market
The commission ultimately agreed to propose rules after the
analysis was released, and it is working to finalize the
Under Lewis, the division has also released studies on
capital-raising methods used by companies to help the SEC and
the public better understand the market and the impact of