The top lawyer of Goldman Sachs Group Inc.’s asset management unit is leaving the bank to become the top aide to U.S. Securities and Exchange Commission Chair Mary Jo White, the agency said Thursday.
Andrew “Buddy” Donohue returns from Wall Street to the agency where he previously served as head of investment management regulation from 2006 to 2010. His appointment adds an industry veteran to White’s staff as the agency fends off questions from other regulators about whether it’s oversight of the asset management industry is sufficient.
“Buddy is a seasoned professional whose previous SEC and private-sector experience will be invaluable in advancing all aspects of the agency’s mission,” White said in a statement. “His deep knowledge of asset management will be especially useful as the commission advances its rulemaking agenda for addressing potential risks in asset management and considers a uniform fiduciary standard.”
Donohue, 64, served as general counsel of Goldman’s asset-management unit, which manages mutual funds. White has outlined a regulatory agenda that would add requirements to how mutual funds manage derivatives and other hard-to-sell assets. Other regulators have questioned whether large asset managers could threaten financial stability.
Before his earlier stint at the SEC, Donohue served as global general counsel of Merrill Lynch Investment Managers from 2003 to 2006, the agency said. He was also a partner in the investment management practice of Morgan Lewis & Bockius, according to the statement.
The tendency for senior regulators to move back and forth between Washington and Wall Street has drawn critics, who say it gives the financial industry undo sway over regulation.
“The revolving door and the pernicious outsized influence Wall Street has over elected officials, policy makers and regulators are seriously eroding confidence of the American people in its own government and democracy itself,” Dennis Kelleher, president of Better Markets, a group that argues for stricter regulation, said in a statement. “This hire will only feed that cynicism.”
Donohue will succeed Lona Nallengara, who announced this month that he will step down next month after serving as White’s chief of staff since 2013. Donohue will start working at the SEC in early June.