Fedders Resigns as SEC Chief of Enforcement, Apologizes to Agency
John M. Fedders resigned Tuesday as director of enforcement for the Securities and Exchange Commission, one day after it was disclosed that he had admitted in divorce court to having beaten his wife seven times during their 18-year marriage.
Fedders announced his resignation in quiet tones at a late-afternoon meeting of his staff. He said that he was sorry if he had embarrassed the agency because of his domestic troubles and that he would seek to mend his personal affairs, according to sources who attended the meeting.
There was no immediate word on who would succeed Fedders in the top enforcement job at the SEC, the agency that monitors stock market trading, investigates corporate fraud and keeps tabs on whether publicly owned corporations are making full disclosures of their activities to their stockholders. It is understood that Gary Lynch, a deputy director, would assume Fedders’ duties for the time being.
No Pressure From Reagan
Fedders’ resignation apparently came without any pressure from President Reagan. Under persistent questioning by reporters earlier in the day, White House spokesman Larry Speakes had said Reagan planned to take no immediate action against the 43-year-old attorney.
Instead, Speakes said, the President had decided to let Fedders’ case “go forward in the (divorce) courts,” where Fedders on Monday obtained a three-month delay in the trial so he could seek reconciliation with his wife, Charlotte.
Fedders’ acknowledged attacks on his wife, as well as personal financial and mental-health problems discussed in the divorce proceedings, were disclosed Monday by the Wall Street Journal. In response, SEC Chairman John S. R. Shad praised Fedders for doing an “outstanding job” as chief of enforcement and said he had not asked for his resignation from the $72,300-a-year post.
The White House said Tuesday evening that it would have no immediate comment on Fedders’ decision to quit after four years of enforcing the nation’s securities laws. Earlier, Speakes had said Reagan “does not condone or advocate or tolerate any type of (family) abuse"--a position that the President first enunciated in his 1984 State of the Union address.
In a letter of resignation to Shad, Fedders said that “the glare of publicity on my private life threatens to undermine the effectiveness of the division of enforcement and of the commission.”
He said news reports “have exaggerated allegations in the divorce trial and have unfairly described occasional, highly regrettable episodes during our marriage.” Fedders said there were seven instances of violence in his 18-year marriage, in the last two years of which he and his wife have been separated.
“These isolated events do not, however, justify the extreme characterizations made in the press,” he told Shad.
Fedders is the first Reagan Administration appointee to quit his post for reasons of personal misconduct other than that involving finances or professional ethics. He never has been charged with any offense.
However, his admissions to spousal abuse are potentially a hot political issue for the Administration, which periodically has been targeted for criticism by women’s rights groups as well as those representing various minorities.
Judith Lichtman, executive director of the Women’s Legal Defense Fund, criticized Reagan earlier Tuesday for not firing Fedders, charging that the President “is revealing by his inaction that he is not a man of principle.”
Sandra Brawders, executive director of the House of Ruth, which runs emergency shelters for abused and penniless women, had called on Reagan to remove Fedders from his job and perhaps to ask him to enter a counseling program.
Fedders, a 6-foot, 10-inch former basketball player at Marquette University in the early 1960s, is a graduate of Catholic University School of Law in Washington. He was a successful securities lawyer earning more than $160,000 annually before taking a pay cut of more than $100,000 a year to assume the SEC post in 1981.