As Lehman Fell, Fed Recruited SEC Officials
In the fall of 2008 as the Federal Reserve Board took on oversight of investment-banking firms, the Board in Washington and New York Fed sought to hire Securities and Exchange Commission officials with more direct knowledge of how those firms operate.
- Bloomberg News
- Former SEC chief Chistopher Cox seated next to former Reserves Secretary Henry Paulson and Fed Chairman Ben Bernanke.
?At one point, in order to tamp down these recruitment efforts, the SEC negotiated a ?no-poaching? agreement with the New York Fed,? former SEC Chairman Christopher Cox said in his written testimony.
Mr. Cox was called to testify in the House Financial Services Committee hearing about the death of Lehman Brothers. Mr. Cox wasn?t present because he was traveling overseas.
Mr. Cox stated the ?no poaching agreement? was abandoned ?at the request of the New York Fed, and the Fed did hire key SEC personnel.
?Such cross-pollination, while temporarily disruptive to the agency whose employees are recruited away, will undoubtedly increase regulatory quality and SEC-Fed cooperation in the long run,? said Mr. Cox, who is now a partner with Bingham McCutchen.