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SEC’s Former IM Director Returns to Help Craft Fiduciary Rule

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The Securities and Exchange Commission announced Thursday that Andrew J. “Buddy” Donohue, former director of the agency’s Division of Investment Management, will rejoin the agency as its chief of staff to help craft its fiduciary rule.

Donohue replaces Lona Nallengara, who will leave the agency in June. As chief of staff, Donohue will be a senior advisor to SEC Chairwoman Mary Jo White on all policy, management and regulatory issues.

“I am thrilled that Buddy will be returning to the SEC to provide his extensive knowledge and expertise to the agency,” White said in a statement. “Buddy is a seasoned professional whose previous SEC and private sector experience will be invaluable in advancing all aspects of the agency’s mission. His deep knowledge of asset management will be especially useful as the Commission advances its rulemaking agenda for addressing potential risks in asset management and considers a uniform fiduciary standard.”

Donohue served as director of the agency’s Division of Investment Management from May 2006 to November 2010, and is credited with being instrumental in developing regulations governing the asset management industry and was also responsible for policy and oversight affecting registered investment advisors as well as investment companies and the investment company industry. 

“It is an honor to return to the SEC to work with Chair White, the Commission, and the extremely talented and hardworking staff,” Donohue said in the statement. “I look forward to serving in this new role with a deep commitment to the protection of our nation’s investors and all of the agency’s core missions.”

But Dennis Kelleher, president and CEO of Better Markets, said the SEC’s hiring of Donohue, a former Goldman Sachs executive, to be the SEC chairwoman’s “very powerful, very influential chief of staff is an affront to the tens of millions of American families who suffered through the 2008 financial crash and are still struggling to recover today,” and reflects the ongoing revolving door of hiring Wall Street executives to SEC posts. “Adding insult to injury,” Kelleher said, Donohue ”also previously worked at the SEC when the agency was missing in action in the years leading up to the worst financial crash since the Great Crash of 1929.”

Since leaving the commission, Donohue has been managing director, associate general counsel and investment company general counsel at Goldman, Sachs & Co. in New York, where he was primarily responsible for legal matters related to its registered investment companies.

From March 2011 to October 2012, he was a partner in the Investment Management Practice Group at Morgan Lewis & Bockius LLP in New York, and served from May 2003 to May 2006 as global general counsel at Merrill Lynch Investment Managers in New Jersey.

He has also served as executive vice president, general counsel, director, and as a member of the executive committee of the investment fund subsidiary of Massachusetts Mutual Life Insurance Co., OppenheimerFunds Inc.

Donohue earned his J.D. from New York University School of Law in 1975 and his B.A., cum laude, with honors in Economics from Hofstra University in 1972.

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