Why Alex Oh resigned from US Securities and Exchange Commission?

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The head of the US Securities and Exchange Commission (SEC), Alex Oh has resigned on Wednesday due to potential conflicts of interest created by her previous work as a lawyer. Last week, she became the first woman of color to lead the SEC watchdog’s enforcement division. The unusual turn of events is a blow for the new chair of the Securities and Exchange Commission, chair Gary Gensler. Point to be noted that Oh was among his first big hires and underscores the challenges of filling top agency roles. Oh sent her resignation letter to Gensler on Wednesday and said, “A development relating to one of her previous cases would be an unwelcome distraction to the important work of the Division”. The issue at hand relates to Oh’s work defending Exxon Mobil Corp against a lawsuit in her previous role as partner at Paul, Weiss, Rifkind, and Wharton & Garrison.

The SEC is reportedly probing Exxon Mobil over asset valuation issues and the matter could create a potential conflict of interest if Oh were to remain in the role. This issue came to the attention of SEC officials this week. Oh previously served as co-leader of Paul and anti-corruption team of Weiss. She worked for a slew of corporations and Fortune 100 companies during her 17 years at the firm. It is noteworthy that Oh decided to resign after US District Judge Royce Lamberth raised questions over her conduct during a deposition in the Exxon case in a Monday order. The chairman of Paul and Weiss, Brad Karp said that he could not comment on ongoing litigation. Karp said, “Alex is a person of the utmost integrity and a consummate professional”.

Other SEC officials, including former chair Jay Clayton, have had long careers in private practice. Progressives have put pressure on Democratic President Joe Biden’s administration to eschew industry hires due to concerns about potential conflicts of interest. The Chief Executive Officer of Better Markets (an advocacy group), Dennis Kelleher said, “The SEC has failed the American people by repeatedly selecting Wall Street defense lawyers as Directors of Enforcement. They come to the SEC with needless and unhelpful baggage, including crippling conflicts of interest regarding current and past clients as well as a mindset, ill-suited to being an aggressive enforcer”. The US Securities and Exchange Commission named Melissa Hodgman as the new acting director of the division.