Investing herself in protecting investors
Few in this day and age would think twice about a woman heading an office of 155 lawyers, accountants and support staff.
That wasn’t the case when Rosalind R. Tyson, the new director of the Securities and Exchange Commission’s Los Angeles region, was contemplating careers.
“I grew up in the era when, really, the major choices for a woman were to be a nurse, a teacher or an executive secretary,” said Tyson, 60, who was raised in New Jersey. “My dad sat me down at one point and said, ‘Well, what would you like of those three?’ ”
By then, she had volunteered as a hospital candy striper and knew that nursing didn’t appeal to her. Ditto for secretarial work.
So she earned a bachelor’s degree from Georgetown University and a master’s from the University of Hawaii and later landed a job teaching French at a Catholic girls’ school in Monterey, Calif.
“I was really good at it and enjoyed it, but it was not somehow my passion,” Tyson said. “When you’re a teacher, you should be so involved in it that it becomes your life, and that was not the case for me.”
As she was “casting about for something else to do,” Tyson took her younger brother’s advice to consider law. She graduated from Stanford Law School in 1978, spent four years in private practice and then found the job that would become her passion.
Tyson joined the SEC’s Los Angeles office as an enforcement staff attorney in 1982 and has been there ever since, in ascending positions. She was named regional director in May, replacing Randall Lee, who left last year for private practice.
“She’s got deep knowledge of the securities industry, she is highly respected both in the L.A. office and throughout the SEC and, most importantly for someone in a position like that, she’s got outstanding judgment,” Lee said. “At the end of the day, judgment is what it’s all about.”
Collaborative approach
The SEC oversees and regulates securities exchanges, brokers and dealers, investment advisors and mutual funds. It examines the records of those it regulates and files civil lawsuits over violations such as insider trading, accounting fraud and misleading investors.
Tyson, whose region covers Southern California, Arizona, Nevada and Hawaii, said she takes a collaborative approach to her job and seeks the input of those who work with her in deciding which cases to go after.
“You don’t pursue every one to the ends of the Earth, because you can’t afford to do that,” she said. Instead, “you pick the best cases” based on the merits and available resources.
One of her favorites resulted in a court order this spring stopping a $29.5-million severance package from being paid to Henry Yuen, Gemstar-TV Guide International Inc.’s former chief executive.
In 2003, the SEC sued Yuen for securities fraud, alleging that he had misrepresented the then-Pasadena-based company’s revenue and lied to auditors. In 2005, Yuen was ordered to pay more than $22 million in financial penalties but was not barred from the severance pay.
The recent court order was a victory for shareholders, Tyson said, because the $29.5 million, which had been held in escrow, will remain with the company.
“One of the very most important things that I have loved about the SEC is that we’re always focused on what is the right thing to do to protect investors,” she said, without having to weigh such considerations as “Does the client have the money to pay for this litigation?”
About 25% to 30% of the SEC’s workload is made up of investment fraud cases, Tyson said. The mechanics of the scams have evolved over time, she said, but the results have not changed dramatically: Ever-popular promises of huge returns still result in burned investors.
Market wisdom
Her advice to prospective investors is to be “informed and skeptical,” especially when putting money into unregistered securities.
Among other things, she and other securities experts say, prospective investors should find out whether the investments or the companies selling them are registered with the SEC or state regulators such as the California Department of Corporations.
They also should check the backgrounds of their brokers or financial advisors; www.finra.org and adviserinfo.sec.gov are two sources.
“Investors need to do a lot of checking out before they invest,” Tyson said.
Though others who have held her job have gone on to lucrative private practices, Tyson said she wasn’t pondering her next move.
“This is the capstone of my career, not a steppingstone,” she said. “My only motivation here is to ensure that the office brings the best cases and does the best exams that we can -- period.”
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Begin text of infobox
Investors’ advocate In the public interest
Who: Rosalind R. Tyson
Age: 60
Job: Securities regulator
Title: Director, Securities and Exchange Commission’s Los Angeles region
Supervises: 155 lawyers, accountants and support staff based in Los Angeles
Residence: Woodland Hills
Education: Bachelor’s in French from Georgetown University, master’s in French from the University of Hawaii, J.D. from Stanford Law School
Family: Husband Timothy, two children
Favorite pastime: Hiking in the Santa Monica Mountains
Thoughts on her work: Believes her job has a public-service aspect that is as rewarding as a lucrative private practice would be: “It’s not so important to me that I drive a Lexus,” she says. “My Honda is fine.”
