FINRA taps Treasury official as chief economist
(Reuters) - The Financial Industry Regulatory Authority (FINRA) has hired a high-ranking Treasury Department official to become its first chief economist, the Wall Street industry-funded watchdog announced on Tuesday.
Jonathan S. Sokobin, currently acting deputy director of research and analysis in the Treasury Department's office of financial research, will join FINRA on May 20, according to FINRA. He will report directly to Richard Ketchum, FINRA's chairman and chief executive.
His new office will work with FINRA's general counsel and other departments in developing new rules and analyzing their potential costs and benefits to the industry and investors. Sokobin's office will also be involved in reviews of existing rules, according to FINRA.
The move is part of a broader effort at FINRA to more deeply scrutinize the potential costs and benefits of securities industry rules it wants to propose.
The U.S. Securities and Exchange Commission, which must approve changes to FINRA's rules, wants FINRA to better support the economic aspects of proposals it submits to the SEC for review, Robert Colby, FINRA's chief legal officer, said last year.
The SEC became more concerned about costs and benefits of industry rules when a federal court, in 2011, threw out an important part of the Dodd-Frank financial oversight law involving shareholders' ability to nominate corporate directors, saying the agency's economic analysis was flawed.
Wall Street's top lobbying group, the Securities Industry and Financial Markets Association, has also been pushing for more detailed analyses of the costs of certain rules to the industry.
Sokobin, who received an MBA and PhD in finance from the University of Chicago, joined the Treasury Department in 2011 as chief of analytical strategy in the office of financial research. Earlier, he was acting director of the SEC's division of risk, strategy and financial innovation. He joined the SEC in 2000 and was named deputy chief economist in 2004.
"I expect he'll do well," said James Overdahl, an economist in the securities finance practice at NERA, a global business consultancy. "He has seen all aspects of the SEC's rulemaking and enforcement agenda," said Overdahl, a former SEC chief economist from 2007 to 2010. Sokobin was his deputy for part of that time.
Sokobin did not immediately return a call requesting comment.
(Reporting by Suzanne Barlyn in New York, additional reporting by Sarah N. Lynch in Washington; Editing by Phil Berlowitz and Nick Zieminski)
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