June 17, 2010
Present at the Creation: The History of the SEC's Revolving Door PolicyYesterday I blogged about Senator Chuck Grassley's concern over the SEC's "revolving door" policy and expressed some personal skepticism that it's the SEC's problem. Today Dan Ernst (Georgetown) has posted on the Legal History Blog an exchange of correspondence between Justice Frankfurter and James Landis on the "revolving door policy." For these New Dealers, the problem was as real as it is now. In response to Landis' argument that restrictions on future employment would impede recruitment of the best attorneys, Justice Frankkfurter expressed a vision of a U.S. civil service equivalent to the British model, second in importance to none in matters affecting the public. Fascinating reading.
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The single most important development in the last 50 years with regard to securities law, was the collapse of the pay scale at the SEC during the 70s and 80s, to the point that by 1990, the average tenure of an SEC attorney was 9 months, and Chairman Shad appeared before the Senate noting that his daughter was going to be paid $10,000 more as a first year associate than the Chairman of the SEC. (Please note that the SEC attorneys were required to sign a 3-year commitment letter, and most still left before nine months were up.)
I still recall, years ago, as I traveled around to various states as an an attorney for the state of Ohio, that there were some states, eg. NY, where it was considered respectable to be a career government lawyer--in other states you were considered total scum if you stayed longer than 3-years. (I may be wrong about NY).
Posted by: ckahrl | Jun 17, 2010 6:18:54 AM