New SEC Commissioner Is A Skeptic Of Post-Bubble Regulation

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President Bush nominated Washington University Law School professor Troy Paredes to the Securities and Exchange Commission yesterday. If confirmed by the Senate, Paredes would replace DealBreaker’s favorite SEC commissioner Paul Atkins. We’d feared that the loss of Atkins, who’s been a consistent critic excessive financial regulation, would be a blow to the SEC. But Paredes looks like a strong successor to Atkins.
Paredes, who is 37 years old, teaches classes on corporations, securities regulation, corporate finance, and the theory of the firm at the St. Louis school. His published work has focused on the political and psychological causes of excessive financial market regulation, as well as the psychology of corporate decision making. The choice has been endorsed by Larry Ribstein, a professor at the University of Illinois College of Law and the author of the Ideoblog.
Paredes has written that the SEC’s decision to require hedge fund managers to register with the commission—a policy which was later struck down by the federal courts—may have been a reaction to the accounting scandals of the late nineties. The commission "did not want to get caught flat-footed and criticized again" after taking a beating from following the collapse of Enron and WorldCom. In an era when everyone seems to have their own pet plan of new regulations following the subprime disaster, this sounds like exactly the kind of approach we need on the SEC.
We fully expect that Paredes will come into criticism from people whose tacit assumption is that only enthusiasts for regulatory growth should be placed in positions of power at regulatory agencies. Bush is right to ignore this question begging approach by appointing an insightful critic.

Bush Nominates Law Professor Troy Paredes To SEC
[Dow Jones Newswires]

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