One of the top U.S. derivatives regulators is joining the Securities and Exchange Commission as its next head lawyer.
Dan Berkovitz, a commissioner with the Commodity Futures Trading Commission (CFTC), will join the SEC as its next general counsel effective Nov. 1, according to a statement from the regulator released Tuesday. Berkovitz will succeed John Coates, who plans to leave the SEC in October and return to teaching at Harvard University. The SEC’s Solicitor, Michael Conley, will fill in as acting general counsel between the two.
The hire reunites Berkovitz with SEC Chair Gary Gensler. From 2009 to 2013, Berkovitz was the CFTC’s general counsel, working with Gensler, who led the regulator as chairman at the time. Underneath Gensler, the CFTC found itself at the center of dealing with the much of the 2008 financial crisis’s wreckage. The regulator ended up moving quickly to enact the regulatory reforms mandated by the Dodd-Frank Act of 2010, making Gensler, in the eyes of many on Wall Street, one of the hardest-charging regulators of the post financial crisis era. In a statement, Gensler said that Berkovitz, while general counsel at the CFTC, was “instrumental in both informing and implementing the Dodd-Frank Act.”
“As General Counsel, he navigated the CFTC through dozens of rule makings to enhance regulatory oversight of the swaps markets, and he has remained a steadfast public servant as a Commissioner,” Gensler said. “He will be invaluable in our work at the SEC.”
Berkovitz joins the SEC at a particularly critical juncture for Gensler. The SEC chair has laid out a sprawling agenda, much of which has already received push back from companies and executives who have expressed an open willingness the challenge the regulator in court. Among the biggest areas of reform Gensler is pursuing are potentially updating the underlying rules of the U.S. stock market, establishing a regulatory regime for the world of cryptocurrencies, and enacting new disclosure rules for companies to follow on everything from the risks their businesses face from climate change to board diversity.
The crossover between Berkovitz’s work at the CFTC and the SEC’s jurisdiction is largely limited, but the CFTC commissioner has expressed worries about the largely unregulated decentralized finance, or DeFi, space—a concern he shares with Gensler. In June, Berkovitz said the CFTC “together with other regulators, needs to focus more attention on this growing area of concern and address regulatory violations appropriately.”
Now Gensler and Berkovitz seem ripe to examine such issues together at the SEC.
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