Nov. 18 (Bloomberg) -- Henry Hu, the law professor hired by the U.S. Securities and Exchange Commission to lead a new unit responsible for spotting threats to financial markets, plans to leave the agency by January.
Hu is stepping down as director of the division of risk, strategy and financial innovation to return to the University of Texas, the SEC today said in a statement. The SEC didn’t name a replacement for Hu, who joined the agency 13 months ago.
SEC Chairman Mary Schapiro created the risk unit in September 2009 after lawmakers criticized the agency for missing Bernard Madoff’s Ponzi scheme and questioned its oversight of investment banks including Bear Stearns Cos. and Lehman Brothers Holdings Inc., which collapsed during the credit crisis in 2008. Schapiro said the unit would help break down communication barriers between divisions and boost the SEC’s understanding of complex financial products.
It was “totally my decision” to step down, Hu said in a telephone interview. “This seemed like a very natural point in terms of having accomplished the very basic goals” of setting up a new division, he said.
Hu’s unit was created through the merger of separate SEC units that conducted economic analysis and tried to identify emerging financial risks. He hired people who previously worked at hedge funds and on Wall Street, adding to an SEC staff primarily made up of securities lawyers.
“I am deeply grateful to Henry for the great start that he has given the division, and for his valued judgment on a wide range of important substantive issues,” Schapiro said in the SEC’s statement.
Hu has written about bank, derivatives, hedge fund and mutual-fund regulation, as well as model risk, risk management, swaps and other financial innovations. He holds degrees in molecular biophysics and biochemistry, and received a master’s in economics and a law degree from Yale University.
Hu said he looks forward “to going back to what I have loved for 20 years, which is research.”
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