Susan Merrill, Finra's head of enforcement, is leaving this week to join the law firm Bingham McCutchen LLP.
She will be a New York-based partner in the firm's 75-lawyer broker-dealer practice group and will lead Bingham's enforcement practice for financial-industry clients, the law firm said today.
Ms. Merrill starts her new post Thursday.
Her departure was
expected.
Ms. Merrill's leaving marks a return to private practice after six years at the
Financial Industry Regulatory Authority Inc. and the
New York Stock Exchange. Prior to joining the NYSE, she was a partner at Davis Polk & Wardwell LLP for 10 years.
NASD and the NYSE's regulatory unit merged to form Finra in 2007.
Ms. Merrill oversaw consolidating the two enforcement units.
“In a way, I felt my work was completed,” she said in an interview. “I think I set the tone for the department by getting people focused on investor protection and making sure we could get money back to investors.”
James Shorris, executive director of enforcement, is running the Finra enforcement department on an interim basis, Ms. Merrill said.
During her tenure at Finra, she witnessed the financial crisis and the collapse of major securities firms, as well as the emergence of numerous Ponzi schemes such as the Madoff and Stanford Financial Group frauds.
Those events “didn't have anything to do with my decision” to leave Finra, Ms. Merrill said. “Those things … happened along the course of financial history … I made the decision that I didn't want to spend [the rest of] my entire career at a regulator.”
Critics have faulted Finra for focusing on smaller firms and minor sales practice issues, while missing larger systemic problems.
Ms. Merrill said that the responsibility for the big issues doesn't always lie with Finra.
“One thing you have to understand about Finra is that we're not the [Securities and Exchange Commission],” she said. “We're charged with bringing some of the small cases that sometimes the SEC doesn't have the resources to bring.”
Finra and the SEC often coordinate cases, “so if the SEC is looking at the top five [brokerage] firms for something, [Finra is] not going to look at the same” firms, Ms. Merrill said.
