SEC staffer's move to Getco prompts review of 'revolving door'

SEC staffer's move to Getco prompts review of 'revolving door'

A US Senator has called on the Securities and Exchange Commission to review its "revolving door" policy, which sees many senior staffers leave for jobs with firms they once regulated.

The call comes after former SEC associate director Elizabeth King joined major high-frequency trading firm Getco and James Overdahl, previously chief economist at the regulator, took up a role as public spokesman for Principal Traders Group, a new HFT unit of the Futures Industry Association.

Commenting on Overdahl's appointment, Don Wilson, chairman, FIA PTG, says: "There has been a lot of confusion and misunderstanding in the media about the role that principal trading firms are playing in exchange-traded markets. Our goal in asking Jim Overdahl to be our spokesman is to provide the media with a better understanding of today's electronic markets and to articulate our views on public policy issues that affect these markets."

The bid to "articulate" views on public policy comes as the SEC looks into the regulation of computer-driven high-frequency trading, which is causing growing consternation in relation to its impact on the market, particularly since the recent 'flash crash'.

Senator Charles Grassley, a member of the finance committee, has sent a letter to the SEC inspector general, David Kotz, asking him to review King's move.

"We need to ensure that SEC officials are more focused on regulation and enforcement than on getting their next job in the industry they are supposed to oversee. The SEC should be more proactive about disclosing and managing potential conflicts like these," says Grasssley.

According to Reuters, in reply, Kotz says the organisation has already opened an investigation into "these issues of concern".

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