Woman Named Top SEC Enforcer
The Securities and Exchange Commission named Linda Chatman Thomsen as chief of its enforcement division Thursday, making her the first woman to head the unit at the forefront of the agency’s corporate-fraud crackdown.
Thomsen, who was the division’s second-ranking official, succeeds Stephen Cutler, who said last month that he would return to the private sector.
Thomsen, 50, joined the agency a decade ago and rose steadily through the enforcement unit. She oversaw the SEC’s investigation of Enron Corp. after its collapse in 2001.
Thomsen takes over at a time when the SEC has largely overcome an image of being lax in enforcing securities laws, a criticism the agency heard in the wake of corporate and Wall Street scandals after Enron.
More recently, the SEC has faced a push-back by business interests, including the U.S. Chamber of Commerce, on some regulatory and enforcement decisions that opponents say have been overly punitive.
In an interview, Thomsen said “the most important thing from my perspective is to maintain our hard-earned and re-earned reputation for excellence and fairness. If I do nothing else, my time as director would be a huge success.”
The 1,300-person enforcement unit, perhaps the SEC’s most visible arm, investigates and brings legal action against alleged securities-law violators.
One decision Thomsen will face is whether to bring charges against the parent of Los Angeles-based American Funds -- the nation’s third-largest mutual fund company -- for alleged wrongdoing related to marketing agreements the firm has had with brokerages.
The SEC enforcement staff this year sent Capital Research & Management, which manages the American Funds, a so-called Wells notice indicating that the agency planned to bring charges. The case, which the SEC has been investigating for more than a year, centers on whether Capital Research improperly used fund assets to compensate brokerages for their sales efforts.
Capital Research has denied wrongdoing, and is fighting two other regulators -- the NASD and California Atty. Gen. Bill Lockyer -- on separate charges related to its brokerage agreements.
Thomsen would not comment on the status of the American Funds case.
SEC Chairman William H. Donaldson, announcing Thomsen’s appointment Thursday, called her “a highly accomplished attorney with a proven record of effective advocacy on behalf of the nation’s investors.”
Some outsiders praised the move.
“What everybody hopes for in a director of enforcement is tough but fair, and I fully expect Linda to be tough but fair,” said Wayne Carlin, former head of the SEC’s New York office who is now in private practice.
Stanley Sporkin, a former enforcement division chief, said Thomsen was “very bright and she knows the program.”
Thomsen graduated from Smith College and has a law degree from Harvard University.
She worked at law firm Davis Polk & Wardwell and as an assistant U.S. attorney before joining the SEC in 1995.
She and her husband, Steuart, a litigator in Washington, have two children.
Thomsen, who was named to the No. 2 position in the enforcement division in January 2002, is said to be well-liked by SEC staffers.
“For people lower down on the totem pole, she is very approachable [and] very easy to get to know,” Carlin said.
Laura Unger, a former SEC commissioner, said Thomsen’s appointment to the high-profile post was important for other women.
“The enforcement division has always been considered a group of tough-minded guys who mercilessly went after the bad guys, and for a woman to assume the role of director of that division shows the agency is changing with the times, and it reflects her ability to be tough,” Unger said.
