By Sarah N. Lynch and John McCrank
WASHINGTON/NEW YORK, April 12 U.S. Securities
and Exchange Commission Chairman Mary Jo White is eyeing a
former adviser to ex-SEC Chairman Arthur Levitt as a potential
contender for a key post in the division that oversees financial
markets, three people familiar with the matter told Reuters.
Joseph Lombard, a market structure expert at law firm Murphy
& McGonigle, is considered a leading candidate for a position in
the agency's Trading and Markets Division, they said.
A second name being floated for a possible job in the
division is Chris Concannon, a former executive with Nasdaq OMX
Group Inc who now works for high-frequency trading firm
Virtu Financial LLC, according to the three sources, who spoke
anonymously as the details were from closed-door discussions.
The Trading and Markets Division at the SEC is in charge of
overseeing exchanges, brokerages and clearing agencies.
It is currently working to complete new rules for the $640
trillion over-the-counter derivatives industry, and is also in
the midst of reviewing whether to make critical changes to
equity market structure.
Lombard previously served on the executive team at
Archipelago Holdings where he was president of the company's
electronic brokerage subsidiary, according to his bio.
He also worked as a managing director in the global equities
division of Merrill Lynch, and served as a senior counsel to
Levitt from 1999 to 2001.
Concannon, meanwhile, is a partner at high-speed trading
firm Virtu Financial LLC, which attempted to buy Knight in
December, but lost out to rival high-speed trading firm Getco
Holding Co. [ID: nL1E8MS3LY]
He worked as an attorney at the SEC from 1994 to 1997. He
later held key positions at Instinet Clearing Services, Island
ECN, and Nasdaq OMX Group.
Bloomberg reported earlier on Concannon being a contender,
though a follow-up story by the Wall Street Journal cited people
familiar with the matter as saying that Concannon had told
executives at Virtu he was unlikely to leave his current post.
Both Lombard and Concannon declined to comment.
Market structure concerns, such as the role of high-speed
traders in the market, became a front-and-center regulatory
issue following the May 6, 2010 "flash crash" in which the Dow
plunged roughly 700 points before sharply rebounding.
It has continued to be a focus of the SEC, especially
following a recent string of technology glitches over the past
year, from Nasdaq's botched handling of Facebook's
initial public offering to Knight Capital's $440 million
trading loss due to a software error.
The coveted director position is currently being filled by
an acting director, John Ramsay.
Mary Jo White, a former federal prosecutor and partner at
Debevoise & Plimpton, was sworn into the SEC Wednesday as its
Although little is known yet about her views on market
structure regulatory policy, White told lawmakers during her
confirmation hearing that she wanted to examine computer-driven
and high-speed trading to see whether any new rules were needed
to protect investors.
"There must be a sense of urgency brought to addressing
these issues to understand their impact on investors and the
quality of our markets so that the appropriate regulatory
responses can be made," she said.
The fact that she is already weighing job candidates for the
Trading and Markets Division signals that she is following
through on her pledge to keep the focus on market structure.
One source familiar with the SEC's thinking said that White
was intent on finding people with experience in the securities
industry to run the division.
"The people they've had have been reasonable people, good
lawyers, but not industry people. And so what ends up happening
then is the staff rules the roost - they have them at their
mercy because they know the facts," the person said.