SEC to hire former Finra exec to run trading division

Feb 13, 2014 @ 8:19 am

The Securities and Exchange Commission is poised to name a former executive of Wall Street's self-regulator as its top overseer of exchanges, brokerages and clearing firms, according to three people familiar with the matter.

SEC Chairman Mary Jo White has selected Stephen Luparello as the new director of the Trading and Markets Division, said the people, who asked to not be named because the decision hasn't been announced. Mr. Luparello, now a partner in the Washington office of law firm WilmerHale, previously served as vice chairman of the Financial Industry Regulatory Authority Inc., where he worked for more than 16 years.

Mr. Luparello would be responsible for developing Ms. White's plans for reviewing regulation of stock exchanges and competitors such as dark pools, as well as drafting new regulations to control risks posed by automated trading systems. He'd also take over responsibility for finishing derivatives rules mandated by the 2010 Dodd-Frank Act for the portion of that market overseen by the SEC.

“He's very experienced and very knowledgeable in the area of market structure,” said Christopher Nagy, president of KOR Trading, a lobbying and consulting firm. “He essentially did this role within Finra, so it makes perfect sense because he's really going to be able to hit the ground running.”

It has taken Ms. White 10 months to fill the trading and markets post, one of the agency's senior staff positions. She set out to hire someone with experience working for an exchange or broker-dealer, according to a fourth person with knowledge of the process. Candidates including Christopher R. Concannon of Virtu Financial, a high-frequency trading firm and market maker on IntercontinentalExchange Group Inc.'s New York Stock Exchange, declined to pursue the job.

Mr. Luparello, 55, didn't immediately respond to messages seeking comment. SEC spokesman John Nester declined to comment.

While working at Finra, Mr. Luparello oversaw all of its examination, enforcement and market regulation programs. He became Finra's head of market oversight in 1999 when he was hired by by Mary Schapiro, who later became SEC chairman. Finra was known then as NASD Regulation and oversaw trading on the Nasdaq Stock Market.

“Finra tends to collaborate much more with broker-dealers than the SEC does, and through that he's gained a very significant understanding of the market,” Mr. Nagy said.

Finra further consolidated its oversight of U.S. equity markets when Mr. Luparello was its vice chairman, adding surveillance of NYSE Euronext's U.S. exchanges in 2010. The organization also expanded its Order Audit Trail System, which maintains a life history of orders, quotes and trades, while Mr. Luparello was there.

Finra's OATS is considered to be a model for the Consolidated Audit Trail approved by the SEC to reconstruct market events such as the May 2010 flash crash, which briefly erased $862 billion from U.S. share values.

The SEC announced several other hires yesterday, including a new investor advocate, a position required under the 2010 Dodd-Frank Law. The agency said it selected Rick A. Fleming, deputy general counsel of the North American Securities Administrators Association Inc., for the role.

Paul A. Leder will serve as director of the SEC's Office of International Affairs and David Frederickson will become chief counsel of the Corporation Finance Division, the SEC said in news releases.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Diversity & Inclusion Awards: 2018 nominations are open

Editor Fred Gabriel and special projects editor Liz Skinner discuss the nomination process for InvestmentNews' inaugural Diversity & Inclusion awards.

Latest news & opinion

Broker protocol: Indecision over recruiting agreement is rampant

Ruckus over recruiting agreement has even wirehouse lifers wondering if it's time

Cetera reportedly exploring $1.5 billion sale

The company confirmed it's talking to investment bankers to 'explore how to best optimize [its] capital structure at lower costs.'

Advisers bemoan LPL's technology platform change

Those in a private LinkedIn chat room were sounding off about fears the independent broker-dealer will require a move to ClientWorks before it is fully ready.

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

Maryland jumps into fiduciary fray with legislation requiring brokers to act in best interests of clients

Legislation requires brokers to act in the best interests of clients.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print