Lori Richards, the SEC's first and only director of compliance inspections and examinations, plans to leave her job after more than two decades, the Securities and Exchange Commission announced today.
She has been director of the Office of Compliance Inspections and Examinations since it was created by former SEC chairman Arthur Levitt in 1995. As director, Ms. Richards managed the examination program for investment advisers, mutual funds, broker-dealers, hedge fund managers, clearing agencies, transfer agents, trading markets, self-regulatory organizations and credit rating agencies.
Among the initiatives she oversaw was a series of targeted exam sweeps focused on emerging compliance risks. Ms. Richards also created a risk-assessment program to focus on firms judged to be at higher risk of compliance problems and led efforts to enhance oversight of SEC-registered firms.
But she came under increased criticism recently, taking heat for the SEC's arm's-length monitoring of failing investment banks and for the failure to detect the massive Ponzi scheme perpetrated by Bernard L. Madoff.
“I've had the honor and privilege of knowing and working with Lori for many years and have always appreciated her dedication, leadership and integrity,” SEC Chairman Mary Schapiro said in a news release.
Prior to becoming director of OCIE, Ms. Richards was an executive assistant and senior adviser to Mr. Levitt on policy and legal matters. Prior to that, she was associate regional administrator for enforcement in the SEC's Los Angeles office, and she held other positions in the enforcement program in Los Angeles from 1985 through 1994.
Ms. Richards has not yet determined yet what she will be doing next, according to SEC spokesman John Nester. She is scheduled to leave the agency Aug. 7.
Associate OCIE director and chief counsel John Walsh will serve as acting director until a permanent replacement is named.
Sara Hansard is a reporter at InvestmentNews, a sister publication of Pensions & Investments