NEW YORK, Sept 24 (Reuters) - The U.S. Securities and Exchange Commission has a shortage of non-lawyers who understand increasingly complex financial markets and needs to hire more, one of the agency’s five commissioners said.
Speaking in New York, Commissioner Troy Paredes said people like economists and quantitative analysts might have better familiarity with various market issues to help the regulator act more quickly when needed.
“For an agency that regulates the world’s largest financial markets to be so dominated by lawyers, is ill-advised,” Parades said at the conference held by the Securities Industry and Financial Markets Association. He said the SEC needs more staff with “a deep understanding of financial markets.”
More than one-third of the SEC’s staff is in its enforcement program, the regulator’s 2008 annual report said.
Chairman Mary Schapiro is trying to improve the SEC’s oversight and standing after the regulator failed to catch the now-imprisoned swindler Bernard Madoff’s Ponzi scheme.
A blistering Sept. 2 report by the SEC’s inspector general said the regulator, including many of its lawyers, missed numerous red flags that if caught could have led Madoff to be brought to justice sooner.
Paredes cautioned against trying to overregulate where risks might be “too speculative to be cognizable.” Regulatory changes that restrict markets and discourage innovation “may do more harm than good” by “restricting flexibility,” he said.
Paredes was appointed to the SEC by President George W. Bush and joined in August 2008. He graduated from Yale Law School in 1996 and practiced law before joining the faculty of Washington University School of Law in St. Louis in 2001. (Reporting by Jonathan Stempel, editing by Dave Zimmerman)