SEC Chairman Gary Gensler resigned his appointment as Compliance Chief of the department on Wednesday in the wake of progressive criticism of her role as a defense lawyer.
Alex Oh, in private practice two decades before Gensler revealed last week his new position, resigned after a federal judge reprimanded her and others in an Indonesian village case against oil giant ExxonMobil. It was an amazing turnaround of the SEC's time at the head of the department for less than two weeks.
"In light of the time and effort that is required for me, I have concluded that this development cannot be addressed without being an unintended diversion to the vital work of the division," Oh said in a letter of resignation.
Gensler was walking away from work as graduates on Capitol Hill and in the militant group increasingly concerned about his decision to employ a long-term company lawyer for one of the government's strongest positions to supervise the financial sector.
This episode marked a shocking political reaction from graduates who had encouraged the appointment of Gensler by Biden after he chaired the Commodity Futures Trading Commission of the Obama administration, which became a stern banking regulator for the former partner of Goldman Sachs.
Prior to the announcement last week of joining the SEC, Oh was working for two decades at Paul, Weiss, Rifkind, Wharton & Garrison law company, representing Fortune 100 firms in public investigations, including Bank of America and ExxonMobil.
Oh was part of an ExxonMobil defense team in a case trying to keep the firm responsible for killing and torturing Indonesian troops amid civil unrest between 1999 and 2001. Villagers said ExxonMobil should face responsibility for hiring military personnel to protect the country's natural gas installations.
Following concerns about the actions of the lawyers of ExxonMobil, USA On Monday, District Judge Royce Lamberth warned Oh and others to protect the firm. The village counsel had told the court that they were "agitated, arrogant and disrespectful" by ExxonMobil's defense team.
The SEC did not respond to a comment request when they were aware of Oh and ExxonMobil problems. In a statement Paul Weiss President Brad Karp defended Oh: "Alex is a highly honest citizen and an executive, with a powerful ethical code."
After the resignation of Oh, Gensler confirmed that the SEC attorney, Melissa Hodgman, would revert to the role of the agency's acting head. Before Oh's nomination, she had served in the role.
Oh's resignation followed a letter on Tuesday sent to Gensler by three major progressive advocacy organizations that said that the decision to hire her "surprised and deceived" Gensler. They encouraged him to withdraw her recruitment.
In their message, Demand Progress, the Progressive Change Campaign Committee and the Revolving Door Project aimed at the years of practice of Paul Weiss, the law firm of Oh.
The Groups asked if Oh "would change its whole legal strategy and completely implement the laws and regulations against which she has developed a defense career."
"We therefore ask you to rethink instantly your decision to appoint Alex Oh, and to choose a lawyer with an acknowledged history of public service, without any shortage," they said. Oh spent four years working for the Southern District of New York as a federal prosecutor before transitioning to corporate work.
"Gary Gensler and the SEC have a ballot to prevent an apparently over zealous guardian of ExxonMobil's rights over Indonesian villages being entrusted by the influential SEC enforcement department," said Jeff Hauser, executive director of the Revolving Door Project on Wednesday.
Leading democratic organizations have complained that some of Gensler's supporters on Capitol Hill were questioning his decision to recruit Oh.
"He spent two decades helping large companies escape the SEC is the one who leads an ambitious resumption of SEC compliance," one assistant to a democratic Senate Demócrat said before Oh's resignation. "Many people are going to look carefully at what she is doing and are now watching Gensler more closely."
The issues raised by Oh stem from the SEC's long-standing disappointment among progressive groups and legislators regarding the SEC's weak implementation of Wall Street, particularly following the global financial crisis of 2008.
Former SEC president Mary Jo White — an Obama candidate who was US lawyer for New York's Southern District before he went to private practice — has been strongly criticized by the Left, particularly Sen. Elizabeth Warren (D-Mass), for having done nothing to oppose the financial industry. During her tenure, Oh served under White as a federal prosecutor.
Certainly, Gensler has worked with progressive workers and reformers from Wall Street to hire certain key personnel. Heather Slavkin Corzo, former head of capital market management at the AFL-CIO, is his current policy manager.
Any of Gensler's supporters urged criticisms to allow him the benefit of the doubt before Oh's resignation.
Barbara Roper, the Head of Investor Security of the US Consumer Federation, said she had refused judgement before she could see if he was acting as a regulator.
"At last, I hope Gensler is toughened on Wall Street, because I want his executive director to share that target irrespective of her history." "If it does not appear to be the case, we would not be shy to share our opinions."
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