As the SEC was voting on its final investment advice rulemaking package, a Capitol Hill hearing was taking place to consider President Trump’s nominee to fill the open Democratic commissioner's seat.
The June 5 hearing to consider Allison Lee’s nomination to fill the vacant seat on the Commission was held by the Senate Committee on Banking, Housing and Urban Affairs. At the hearing, the committee considered five additional nominations to various other government positions that fall within its jurisdiction.
In her opening statement, Lee cited the importance of the SEC in ensuring that investors are taking the kinds of risk they sign up for, such as business and economic risk, and not the risk of fraud or poorly structured or opaque markets that may disadvantage investors.
“We are a nation of investors, both retail and institutional, protected by the SEC. This protection is especially important as we continue the shift away from employer pensions toward individual plans in which people must fund and select their own retirement assets and manage their own risk,” she testified.
Lee noted that she’s worn a lot of hats and juggled a lot of priorities, from working her way through college and law school, to raising children, paying the bills and saving for retirement. “If I have the honor of being confirmed, I will bring all of these perspectives to bear in my role as a Commissioner, and I will reach out and listen to all constituencies served by the SEC to further its critical mission,” she stated.
Just one question was directed at Lee during the hearing’s questioning period. Sen. Robert Menendez (D-NJ), asked whether she believes tough penalties will serve as an effective deterrent for future lawbreakers and punish bad actors in the securities industry.
“I actually think compliance is the overall goal of enforcement and the best way to get at compliance is deterrence. I think that includes tough penalties where they are warranted on a case-by-case basis. But I do support strong penalties in the right case, because that has the best deterrent value,” Lee responded.
Lee is currently a consultant with Congress Park Consulting, teaches courses on U.S. corporate and securities law in Spain and Italy, and works as a contributing author on treatises in corporate and securities law. She previously served as Senior Counsel in the Division of Enforcement’s Complex Financial Instruments Unit and as counsel to former SEC Commissioner Kara Stein.
The Senate Banking Committee must approve Lee’s nomination before the full Senate can vote on it. A vote by the committee has not yet been scheduled.
The five-member Commission currently consists of four members: Democrat Robert Jackson, Jr. and Republicans Hester Peirce, Elad Roisman and Chairman Jay Clayton. If Lee is confirmed, she would replace Democrat Kara Stein, who left the Commission at the beginning of this year. Jackson, whose term expires next month, has announced that he plans to leave by this fall.