Goldman Executive Tapped by SEC to Advise on Brexit, MiFID

(Bloomberg) -- U.S. regulators have turned to a top Goldman Sachs Group Inc. executive to help them deal with two of the most daunting issues confronting Wall Street: Brexit and new European rules that will upend banks’ research businesses.

Alan Cohen, who spent 13 years as head of compliance at the New York-based bank, will join the Securities and Exchange Commission as a senior policy adviser to Chairman Jay Clayton, the agency said in a Thursday statement.

Goldman Executive Tapped by SEC to Advise on Brexit, MiFID

Cohen’s responsibilities will include advising the SEC on the U.K.’s separation from the European Union and MiFID II, sweeping EU regulations that require brokers to charge for analysis rather than offering it as a free perk along with other services, according to the statement.

Clayton, a former Sullivan & Cromwell partner whose clients included Goldman, faces increasing pressure from financial firms to ensure that U.S. banks can continue to sell their market analysis to European money managers once the revised MiFID takes effect in January. There is concern that the European rules conflict with U.S. regulations, and time is running short for the SEC to come up with a solution.

Goldman Ties

Tapping a Goldman executive could rekindle criticism that Clayton faced during his Senate confirmation hearing in March. Senate Democrats sought to lump Clayton in with top Trump administration officials who had deep Goldman ties, such as Treasury Secretary Steven Mnuchin, a former partner at the firm, and National Economic Council Director Gary Cohn, who was the bank’s president before joining the White House.

Democrats raised concerns that Clayton may be more focused on helping Wall Street than protecting mom-and-pop investors, which he rejected. Clayton, whose wife left a job at Goldman when he started at the SEC, has cast his prior work for financial firms as a strength for his new job.

Cohen, a graduate of Rutgers law school, worked as an attorney at O’Melveny & Myers for more than a decade before joining Goldman, the SEC said. Since stepping down as the bank’s head of compliance in January, he’s been advising its executive office, which includes communications, government affairs and investor relations. In addition to Brexit and MiFID II, the SEC said he will advise the agency on issues related to the clearing and settlement of derivatives.

Goldman wasn’t required to disclose Cohen’s salary and bonuses, but regulatory filings leave clues to other parts of his compensation. During his time at the bank, Cohen received awards of restricted shares and stock options worth at least $43 million when they were granted. He’s realized gains of at least $20 million on stock sales, and since 2009, he’s collected another $4.36 million from investments in funds offered to Goldman employees, proxy statements show.

Cohen, 67, held 58,600 Goldman shares by the time he resigned from the compliance job, valued at $13.1 million as of Thursday’s close in New York.

Chris Carofine, a spokesman for the SEC’s Clayton, declined to comment on Cohen’s appointment.

Revolving Door

It’s not uncommon for SEC leaders to have done work for banks in private practice or to hire executives from financial firms. Former U.S. prosecutor Mary Jo White spent years at law firm Debevoise & Plimpton representing financial firms before returning to government service as the SEC’s chairman under Barack Obama in 2013. At the SEC, White tapped a former Goldman executive to be her chief of staff.

Along with Cohen’s hiring, Clayton announced several other senior staff members. They include Jeffrey Dinwoodie, an attorney from Davis Polk & Wardwell, and promotions for SEC staff members John Cook, Raquel Fox and Kristina Littman. Carofine, who started working at the agency earlier this year, was named director of communications.