The U.S. Securities and Exchange Commission named Thomas Butler, a former Morgan Stanley managing director, to head a new credit-ratings office created as part of the Dodd-Frank financial regulatory overhaul.
Butler will run a staff of about 25 lawyers, accountants and examiners responsible for monitoring the nine registered nationally recognized statistical rating organizations, the SEC said in a statement today. The office will issue an annual report on each of the ratings firms, which are led by Moody’s Investors Service and Standard & Poor’s.
Credit-rating companies were at the center of the 2007-2008 financial crisis that triggered the longest recession in seven decades. The biggest credit raters were “key enablers of the financial meltdown,” justifying the exploding sales of mortgage-linked securities with top ratings before issuing downgrades that “wreaked havoc across markets,” the Financial Crisis Inquiry Commission said in a January 2011 report.
Butler, who starts June 18, worked 14 years at Morgan Stanley Smith Barney and its predecessor, Citigroup Inc.’s global wealth management division, the SEC said in the statement. He was chief operating officer for the broker’s investment strategy, investment advisory, global investments and public sector units. Butler previously worked at UBS AG’s securities division and investment firm Babcock & Brown Inc.
Ratings-firm examinations required by the 2010 Dodd-Frank act had been done by the SEC’s Office of Compliance Inspections and Examinations before the creation of the new office, the regulator said in the statement.
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