Veteran enforcement official leaving Finra

James Shorris to return to the private sector after seven years with regulator; had said private placement crackdown was top priority

Finra today announced that James S. Shorris, who has served in various leadership positions for its enforcement department, will leave the organization in April.
Mr. Shorris’ departure follows in the wake of J. Bradley Bennett’s taking over as head of enforcement at the Financial Industry Regulatory Authority Inc. last month.
Prior to Mr. Bennett’s arrival, Mr. Shorris was acting enforcement director, taking on that role from Susan Merrill, who left Finra in March 2010.
Industry observers believe that Mr. Shorris had his name in the hat for the top post.
Mr. Shorris declined to comment on whether he was under consideration for the job.
“After seven years [at Finra], it’s time to move on,” he said.
Ms. Merrill, the former head of enforcement at the NYSE, was given the top enforcement spot in 2007 when the New York Stock Exchange and NASD merged. Mr. Shorris ran the Finra enforcement department at the time.
Mr. Shorris became executive director of enforcement at the newly combined entity.
“It was a great position. I really enjoyed it,” he said.
Working in what was essentially the No. 2 spot allowed him to focus on more on day-to-day enforcement matters, Mr. Shorris said.
Finra’s enforcement efforts will continue unabated after he leaves, Mr. Shorris said.
This month, he told broker-dealer executives that the sale of failed private placements is Finra’s No. 1 enforcement priority this year.
That emphasis will continue, Mr. Shorris said in an interview today.
“I’m confident you’ll see more [of those cases] come to fruition,” he said. “We have a very dedicated team in the enforcement department … all working hard” on the private-placement cases.
Finra is coordinating with court-appointed receivers for the failed deals to establish restitution funds for investors, he added.
“Jim is a good lawyer and good regulator in his role with the enforcement department,” said Joel Beck, an industry defense attorney and former Finra lawyer. “He’ll be missed.”
At Finra, Mr. Shorris was a “tough negotiator and a good advocate for
Finra’s position” on enforcement cases, said Brian Rubin, a partner at Sutherland Asbill & Brennan LLP and a former enforcement attorney with the NASD and Securities and Exchange Commission.
Mr. Shorris said he plans to return to the private sector as a lawyer.
“I don’t know exactly what I’ll be doing,” he said. “I’m just starting to look.”
However, working as an in-house attorney at a financial services firm “is on my list,” Mr. Shorris said.
Prior to joining the NASD, Mr. Shorris was counsel to the law firm of Bingham McCutchen LLP and held legal and compliance positions with two broker-dealers, including the former Tucker Anthony firm.
“Working in-house is a special kind of experience,” he said. “I think the issues you see from inside a firm are more interesting and broader than see you see” as an outside counsel or enforcement official.