WASHINGTON (Reuters) - 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 December 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 comment.
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 chief economist.
In an agency historically staffed mostly with lawyers, Lewis has pushed to add more economists and boost the division’s role in policymaking.
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 mutual funds.
The commission ultimately agreed to propose rules after the analysis was released, and it is working to finalize the measure.
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 regulations.
Reporting by Sarah N. Lynch; Editing by Leslie Adler and Richard Chang