Barbara Roper’s new role as a senior advisor to Securities and Exchange Commission Chair Gary Gensler both surprised and buoyed investor and consumer protection advocates.
But according to some SEC observers, the hiring of Roper—a staunch critic of traditional financial services during her time as the director of investor protection at the Consumer Federation of America—is just the latest move that indicates a directional shift at the commission under the new chair.
From Renee Jones’ appointment as Director of the Division of Corporation Finance to the hiring of John Coates as the SEC’s General Counsel, and New Jersey Attorney General Gurbir Grewal’s appointment as the commission’s Enforcement Division Director, Gensler’s moved quickly to fill open positions since he was nominated by President Biden to succeed former Chair Jay Clayton.
Brian Hamburger, the CEO and President of MarketCounsel, said the professional backgrounds of these new hires signaled a departure from the traditional resumes of more conventional SEC hires, who often come from larger law firms representing regulated firms.
“I think a lot of the appointments we’re seeing may not be as clear as (Roper), but certainly show a real trend away from the big Wall Street law firms,” he said. “I think that’s a win for investors and a win for independent advisors.”
Other notable hires include Amanda Fischer, previously the Policy Director at the Washington Center for Equitable Growth who joined the commission as a senior counselor for Gensler, and policy director Heather Slavkin Corzo, previously the Director of Capital Markets Policy at the AFL-CIO.
Many of the hires over the previous months have some background in litigation; in addition to her role as Professor of Law and Associate Dean for Academic Affairs at Boston College Law School, Jones represented private and public companies in corporate and securities matters at Hill & Barlow, while Coates was a partner at Wachtell, Lipton, Rosen & Katz with a specialty in M&A and financial institutions, before becoming a law and economics professor at Harvard.
But to Tyler Gellasch, head of the nonprofit organization Healthy Markets, the hires demonstrate Gensler is naming key staff with robust background in policy as well as professional experience as investor advocates.
“They’re very engaged in the policy and regulatory debates, but they’re very much not the traditional industry insiders who often staff up agencies,” he said. “It’s a strong statement that the Chair is focused on restoring the commission to what it has long claimed to be, the investors’ advocate.”
Gellasach said Roper would be one of the most ‘policy-deep’ investor advocates who’d ever served on the commission, and her perspective could be particularly impactful in the debates about what kind of direction the SEC should offer registrants regarding Regulation Best Interest.
“There is nobody who has greater expertise on the duty of care obligations for brokers and investment advisors than Barbara Roper,” he said. “You may agree or disagree with her, but there’s nobody who’ll say they have a better handle on how the rule can and can’t protect advisors.”
Dale Brown, the president and CEO of the Financial Services Institute (FSI), congratulated Roper on her appointment in a statement to WealthManagement.com.
As she enters this new role, we invite Ms. Roper to join in our ongoing constructive dialogue with the SEC so together we can build on Reg BI’s success and ensure consistent and effective rulemaking and enforcement for all stakeholders," he said.
Knut Rostad, the co-founder and president of the Institute for the Fiduciary Standard, cited Roper’s hiring and Grewal’s move into the Enforcement Director position as indications that Gensler was thinking about the longstanding and ongoing fiduciary debate roiled by Reg BI’s passage (during Grewal’s tenure as New Jersey’s Attorney General, the state’s Bureau of Securities Department proposed regulation creating a uniform fiduciary standard for advisors and brokers working in the state). To Rostad, Roper’s appointment underscored what he saw was the scale of changes that he believed needed to be made to Reg BI.
“The fact that Chairman Gensler hired Barbara Roper is an excellent sign that he understands how big the task is,” Rostad said.
Hamburger, like Rostad, said he couldn’t recall someone with the background and the investor advocacy positions like Roper holding such a role within the commission. He agreed the amount of work ahead of the SEC was significant, describing Reg BI as a “failed attempt to harmonize” the investment advisor and broker/dealer groups.
“I’m hopeful Chair Gensler gets it and we can quickly reverse the harm that Reg BI does for consumers and the harm it inflicts upon independent advisors,” he said. “There are so many other rules that need attention that the prior administration failed to really act upon. This presents a great opportunity for them to really catch up."
