Annette Nazareth, the Securities and Exchange Commission’s lone Democrat, will step down on January 31st of this year, according to a letter she sent to President George W. Bush.
The letter, obtained by CFO.com, puts an expiration date on her tenure of more than nine years at the SEC. Nazareth announced her intention to resign last October, but did not say when it would happen. She could have stayed on in her current role until 2009.
“My service at the commission has been the most rewarding and stimulating of my career, but I believe it is time for me to pursue other professional opportunities,” Nazareth wrote in the letter that was dated last Friday.
Nazareth’s resignation did not come as a surprise. Her first term ended last June and commissioners can stay in their positions for up to 18 months after their terms end, depending on when a successor is named. Nazareth previously told President Bush — who appointed her to the position two years ago — that she did not want to be reappointed.
The departure of Nazareth puts the makeup of the SEC’s five-commissioner roster in limbo. Roel Campos, Nazareth’s fellow Democrat on the commission, also announced last year that he was leaving. By law, the SEC cannot have more than three members from the same political party, which effectively means President Bush will have to find two Democrats to join SEC chairman Christopher Cox and the other commissioners, Kathleen Casey and Paul Atkins, who are all Republicans.
SEC spokesman John Nester told CFO.com that the timeframe for the replacements will be determined by the White House and the Senate.
Before becoming a commissioner, Nazareth was head of the SEC’s division of market regulation. In her letter, she noted the transformation of national market system rules as one of the most important accomplishments during her time at the agency. Particularly notable was the transition from floor-based trading systems to electronic trading. Nazareth pushed hard for the introduction of Reg NMS, a system of pricing stocks that could handle the speed of electronic trading.
Nazareth also commended the SEC’s application of “prudential regulatory principles” to its oversight of investment-bank holding companies. This regulation made it easier for big banks to communicate the risks they were facing to the SEC.
Before joining the SEC staff in 1998 as special counsel to former commissioner Arthur Levitt, Nazareth worked at Smith Barney as deputy head of its capital markets legal group, and she served as counsel for Lehman Brothers and Mabon Securities Corp. She began her career at law firm Davis Polk & Wardwell, working with commercial banks, investment banks, and corporations on mergers and acquisitions, syndicated loans, and securities offerings.
Nazareth, who did not return calls to CFO.com for comment, has said that she plans to return to the private sector.