Of the SEC, Foxes and Henhouses

By James Kwak

One of our readers emailed in a link to this Bloomberg story about the new “chief operating officer” of the enforcement division of the SEC: Adam Storch, “a 29-year-old from Goldman Sachs Group Inc.’s business intelligence unit” who “had worked since 2004 in a unit at that reviewed contracts and transactions for signs of fraud.”

I went back and forth about posting this because, as far as I can tell, it’s not that important a job; according to the WSJ, “Mr. Storch will oversee division operations that include budget, information technology and administrative services. He will also supervise the workflow associated with the collection and distribution of fair funds to harmed investors.” It’s back-office administration, not deciding whom the SEC is going to pursue. I don’t think this is in the same league as, say, Goldman’s chief lobbyist becoming the Treasury secretary’s chief of staff. (Note, however, that Zero Hedge says it is “arguably the most critical post at the SEC.”)

But still, even if it is a routine back-office job, why someone from Goldman (GS) who makes Neel Kashkari look like an elder statesman? As our reader pointed out, there are at least two relevant themes here. One is the revolving door: someone who is 29 on Wall Street is likely to see his future there, not as a civil servant in Washington. The other is cognitive capture; why does the SEC think it needs a Goldmanite to handle its budget, IT, and administrative services? There are other good companies out there, really, somewhere, or we have a much bigger problem on its hands.

Comments

[athena:]

I give up.

Oct 19 03:17 PM

[doubleguns:]

Agreed, find a trashcan we call all go puke in.


On Oct 19 03:17 PM athena wrote:

> I give up.

Oct 19 04:16 PM

[Graham and ...:]

Sounds like a pretty big job for a 29-year old.

Unless he's from Goldman. Then he's probably a "plant."

Oct 21 11:13 AM