Trump Nominates Allison Lee to SEC

Lee could be an important swing vote on standards of care.

The Trump Administration nominated Allison Lee to the Securities and Exchange Commission for a five-year term ending June 2022.

Lee served in a number of different senior roles at the SEC between 2005 and 2018 and was previously counsel to former SEC Commissioner Kara Stein.

Trump appointed the SEC’s four current commissioners. Two commissioners must be from different political parties than the other three. Lee would be the second Democratic commissioner and would replace Stein, whose tenure ended in January.

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If confirmed, Lee could cast the deciding vote on proposals to implement new standards of care on brokers.

In April 2018, the SEC proposed establishing a standard of conduct for broker-dealers after a fiduciary rule from the Department of Labor was struck down by an appellate court.

But Democrats in the House of Representatives have said current proposals to reform rules around investment advice were not strong enough.

“While the SEC’s [Regulation Best Interest] may be an improvement on the status quo, it is still far too weak,” Carolyn Maloney, the chairwoman of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, said at a meeting of the panel last month.

Maloney said the SEC proposal would continue to allow brokers to work in their own self-interest.

SEC Chairman Jay Clayton has called the Regulation Best Interest a priority.

Lee previously worked as a litigation partner at the law firm Sherman & Howard law in Denver, Colorado. According to an email from the White House, after leaving the SEC she taught financial regulation and corporate law at universities in Spain and Italy.

Her work at the SEC included cases against JPMorgan, Chase, and Credit Suisse related to mortgage-backed securities sold around the time of the 2008 financial crisis.

Lee would need to go before the Senate Banking Committee and be confirmed by the Senate.