Senate confirms SEC nominees

The Senate confirmed two nominees to the Securities and Exchange Commission on Friday, bringing the agency back to full power. Luis Aguilar, a Democrat, was reappointed to the commission while Daniel Gallagher Jr., a Republican replacing the departed Kathleen Casey, will serve on the five-member panel for the first time. The commission had been operating with only four members since Ms. Casey left over the summer. “Investors and markets are best served when the SEC benefits from the dedication and broad range of views that a full five-member commission provides,” SEC Chairman Mary Schapiro said in a statement. “I look forward to Luis's continued service, and I welcome Dan's return to the agency as we continue our efforts to protect investors and improve our markets and economy.” Mr. Gallagher previously served at the SEC as acting co-director of the Division of Trading and Markets. During his confirmation hearing before the Senate Banking Committee, Mr. Gallagher made clear that he shares Ms. Casey's commitment to demanding robust cost-benefit analyses of regulations the SEC promulgates to fulfill the Dodd-Frank financial reform law. Last January, Ms. Casey and the other Republican commissioner, Troy Paredes, wrote a dissent to an SEC staff report to Congress which recommended that the agency proceed with a rule to impose a universal fiduciary duty on anyone providing investment advice to retail clients. Ms. Casey and Mr. Paredes argued that the study's conclusion lacked sufficient economic analysis. The SEC has indicated that it will not propose a fiduciary duty rule until sometime next year. The commission has the authority to issue such a regulation under Dodd-Frank. Senate approval of Mr. Aguilar and Mr. Gallagher demonstrates that Republicans aren't as wary of the SEC as they are of the newly established Consumer Financial Protection Bureau. Earlier this year, 44 of 47 Senate GOP members signed a letter vowing to block the nomination of a CFPB director until Congress was given more control over the regulator. In another personnel move today, the SEC named Andrew Bowden associate director to lead the National Investment Adviser/Investment Company Examination Program in the Office of Compliance Inspections and Examinations. Mr. Bowden, who has held senior executive positions in compliance, legal and business units of Legg Mason Inc., will start Nov. 1. He will be in charge of a staff of 450 lawyers, accountants and examiners. “Drew brings extensive experience in the operation and oversight of investment advisers and investment companies and will help us implement our risk-based approach to examination of investment advisers and companies,” OCIE director Carlo di Florio said in a statement.