SEC Commissioner Aguilar Offers ''Helpful Tips'' to Future SEC Commissioners
Commentary by Bob Zwirb
SEC Commissioner Luis A. Aguilar provided a set of principles, thoughts, and ideas that he hoped future Commissioners, and their counsels, may find useful. He will be leaving the SEC at the end of December.
Commissioner Aguilar commented on:
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Personal Staff: Choosing the right counsel may be one of the most important decisions [that one can] make as a Commissioner. He urged future Commissioners to consider their counsels to be their alter egos.
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Internal Procedures: Future Commissioners must familiarize themselves with the Reorganization Plan No. 10 of 1950, which provides that the SEC Chair alone determines the Commission's agenda, as well as the content of the recommendations [they] will be asked to vote on. He urged future Commissioners to understand the substantive rules and procedural processes at the SEC, e.g., how rulemakings work, how enforcement recommendations work, how seriatim votes work, etc.
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The Role of a Commissioner: Being a Commissioner requires a fresh perspective. He urged future Commissioners to stay well informed, be proactive in reaching out to other federal or state regulatory agencies, remain open to various viewpoints, dig into so-called precedents and practice healthy skepticism.
Commissioner Aguilar called on future Commissioners to do their homework. The American people cannot afford to have you 'wing it,' he said.
Commentary
One of the surest ways to forsake the opportunity to bring a "fresh perspective" to the table is for a new commissioner to accept recommendations for personal staff from current and past commissioners. In many cases, such persons will recommend experienced and "friendly" legal counsel - individuals who have worked for previous commissioners, are familiar with the inner workings of the agency, and can be counted on to steer new members "the right way." Too often, however, such individuals have limited backgrounds in economic policy and aren't versed in the ways that markets work. They bring (or return) a same-old, same-old perspective to the table. As Commissioner Aguilar wisely observes, it's important to "[p]ractice healthy skepticism . . . [because] everyone who reaches out to the Commissioner's office has an agenda." The same goes for accepting recommendations on whom to hire.
New commissioners should be aware that the agency they are joining has a culture of its own, and that members of the agency may be more inclined to perpetuate that culture rather than to challenge it. The danger is that a new commissioner, especially one who is not grounded in economics or market practice, will consider many of the choices that confront him or her to be purely technical legal matters and will defer to the judgment of an "experienced" attorney. The missions of regulatory agencies like the SEC, the CFTC and the FTC involve important matters of market and economic policy and not merely technical legal interpretation. Generally, such institutions favor the legal perspective over the economic one, and prefer the staff insider's familiar view to that of a fresh outsider. For that reason, commissioners who strive to offer a new perspective to an agency should consider bringing in their own counsel from the outside and ensuring that that counsel includes individuals grounded in regulatory economics.