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SEC enforcement chief resigns just days after taking job

SEC enforcement chief resigns just days after taking job
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The head of the Securities and Exchange Commission (SEC) enforcement division resigned Wednesday following an order from a federal judge potentially raising questions about her previous legal representation of ExxonMobil.

Alex Oh stepped down as the SEC’s enforcement chief, the agency announced Wednesday afternoon, just six days after she took the post under heavy criticism from progressives and other financial sector critics.

Oh had been a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP before joining the SEC, co-chairing the law firm’s practice focused on corruption cases. She had been one of several attorneys at the firm defending ExxonMobil against a lawsuit filed by Indonesians who claimed they were beaten and tortured by guards hired to protect a company facility.

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In her resignation letter, reported by several outlets, Oh said she needed to leave the SEC to prevent “a development” regarding the ExxonMobil case from distracting from the commission’s work.

Her resignation came two days after the judge presiding over the ExxonMobil case in the U.S. District Court for the District of Columbia ordered attorneys representing the oil company to back up claims it made about the legal team representing the victims.

The ruling from Judge Royce C. Lamberth did not name Oh specifically, but told ExxonMobil’s lawyers to substantiate its claims that the opposing legal counsel was “agitated, disrespectful, and unhinged” during a deposition. Failure to do so could lead to sanctions for the ExxonMobil lawyers, the judge wrote.

“We cannot comment on this matter because it involves a ruling in an ongoing litigation. Alex is a person of the utmost integrity and a consummate professional, with a strong ethical code,” said Brad Karp, chairman of Paul, Weiss, Rifkind, Wharton & Garrison.

SEC Chairman Gary GenslerGary GenslerWith Washington recommitted to innovation, cryptocurrencies need a congressional fix The Hill's Morning Report - Presented by Facebook - Democrats' agenda in limbo as Senate returns SEC removes Republican watchdog after progressive lobbying effort MORE’s decision to hire Oh surprised and enraged groups that have long criticized the commission’s approach to enforcement. Democratic lawmakers and financial sector skeptics argue that the SEC has let off bad actors under the leadership of corporate attorneys who once represented such firms.

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Oh’s hiring also raised questions among those critics about Gensler’s stated commitment to crack down on major financial firms involved in overly risky or fraudulent activities. Gensler, who led the Commodity Futures Trading Commission (CFTC) under former President Obama, was lauded by progressives during his recent confirmation process as a tough Wall Street watchdog.

“The SEC has failed the American people by repeatedly selecting Wall Street defense lawyers as Directors of Enforcement. They come to the SEC with needless and unhelpful baggage, including crippling conflicts of interest regarding current and past clients as well as a mindset and milieu ill-suited to being an aggressive enforcer of the law against those past private sector clients,” said Dennis Kelleher, president and CEO of Better Markets, a nonprofit group that supports strict financial regulation and oversight. “Now is the time to break with that disreputable pattern of hiring the wrong people hoping they will do the right job the American people need done.”

Oh will temporarily be replaced by Melissa Hodgman, who served as acting enforcement director before Oh was hired.

"Melissa is an exceptional attorney who has proven to be an effective leader of the Enforcement Division. I’m grateful that she will take on this role again and look forward to working closely with her to fulfill the mission of the SEC," Gensler said in a statement. "I thank Alex for her willingness to serve the country at this important time."