SEC's Daniel Gallagher resigning as commissioner

Daniel Gallagher is resigning his post as a Republican member of the Securities and Exchange Commission after four years, a time marked by partisan battles over the regulatory response to the 2008 financial crisis, according to three people familiar with the matter. The White House will now need to replace him as well as Luis Aguilar, the Democratic commissioner whose term expires next month. The departures herald a transformation at the agency, which has struggled to write dozens of new regulations arising from the 2010 Dodd-Frank Act. Mr. Gallagher, 42, plans to remain on the five-member commission until a successor is confirmed, a process that could take several months, the people said. The White House has already identified candidates to fill both his and Mr. Aguilar's seats. A securities lawyer and ex-agency staff member, Mr. Gallagher has been a critic of many of the rules required by Dodd-Frank. Known for his forceful dissents and speeches, he frequently rapped the Federal Reserve for trying to impose its oversight on firms traditionally regulated by the SEC. While Mr. Gallagher clashed with former Chairwoman Mary Schapiro on policy matters, he has a less-strained relationship with current SEC chief Mary Jo White. He was instrumental in negotiating a compromise overhauling rules for money market mutual funds in July 2014, passed during Ms. White's tenure. (Related read: How partisan politics have poisoned the SEC) Mr. Gallagher, who joined the commission in 2011, pushed to make it easier for small companies to raise capital and advocated for the agency to undertake a major review of the rules governing stock exchanges. Mr. Aguilar, 61, has been on the commission for almost seven years. A former general counsel of money manager Invesco Ltd., Mr. Aguilar largely supported the Dodd-Frank regulatory expansion and often advocated for stiffer penalties for wrongdoing by Wall Street firms. Mr. Aguilar declined to comment. An aide to Mr. Gallagher didn't return a phone message seeking comment. It's unclear when Mr. Aguilar will leave the agency. While his term expires in June, he also could remain until his successor is confirmed by the Senate. The candidates being reviewed by the White House to replace Mr. Aguilar include former SEC attorneys Keir Gumbs and Philip Khinda, according to the people, who asked not to be named because the matter wasn't public. Mr. Gumbs is a partner at law firm Covington & Burling in Washington, and Mr. Khinda is co-head of the securities enforcement practice at Steptoe & Johnson. Mr. Gumbs declined to comment. Mr. Khinda didn't reply to messages seeking comment.