Securities Regulation Daily Wrap Up, PCAOB NEWS AND SPEECHES—Board replenishment includes two career second acts, (Nov 8, 2021)

By Mark S. Nelson, J.D.

Former SEC Commissioner Kara Stein and the CFTC’s Tony Thompson will join the PCAOB board as part of an effort by the SEC to replace most of the board’s members.

The SEC announced that four individuals will soon join the Public Company Accounting Oversight Board as board members. According to an agency press release, Erica Y. Williams will be chairperson and Christina Ho, Kara M. Stein, and Anthony (Tony) C. Thompson also will join as board members. Current board member Duane DesParte will continue as a board member, although he also will continue as acting chairperson until Williams is sworn in.

“With these additions to the Board, the PCAOB will have the leadership to meet the mission given to it by Congress. Erica, Christina, Kara, and Tony have demonstrated deep commitment to public service. They will represent the interests of investors and the public at the PCAOB,” said SEC Chair Gary Gensler. “I would like to thank Duane DesParte for his valuable service as acting chairperson during the last several months, and I am pleased that he will stay on as a key member of the Board.”

Incoming Chairperson Williams has held a variety of positions at the SEC, including as deputy chief of staff to three former SEC Chairs. More recently, Williams was a litigation partner at Kirkland & Ellis LLP. Williams also had spent time after she left the SEC as special assistant and associate counsel to President Obama for issues related to financial and economic policy.

New board member Stein was an SEC Commissioner from 2013 to 2019. She most recently was Distinguished Policy Fellow and Lecturer-in-Law at the University of Pennsylvania Carey Law School and Director of the AI, Data, and Capital Markets Initiative at the Center on Innovation at the University of California Hastings Law School. Stein was part of the Commission that approved the PCAOB’s proposed changes to the auditor’s report regarding critical audit matters, the first such changes in decades. Stein also was known to disfavor SEC waivers regarding well-known seasoned issuer status or other bad actor status in some enforcement cases (See e.g., orders regarding Deutsche Bank AG; UBS AG, Barclays Plc, Citigroup Inc., JPMorgan Chase & Co. (“JPMC”), and the Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group, plc).

Thompson currently is the executive director and chief administrative officer of the CFTC. Thompson would be the second recent high profile CFTC addition to the SEC and/or PCAOB, following the move of former CFTC Commissioner Dan Berkovitz to the SEC, where Berkovitz is the agency’s general counsel. Previously, Thompson worked at the Department of Agriculture after having held several financial positions during a 32-year career in the U.S. military where he achieved the rank of colonel.

Ho most recently was vice president of Government Analytics and Innovation at Elder Research. She also has held positions at the Treasury Department, was a college administrator, and was a Senior Manager with Deloitte & Touche LLP.

DesParte became a PCAOB board member in April 2018 and has been the PCAOB’s acting chairperson since June 4, 2021. DesParte previously was chief accounting officer and corporate controller at Exelon Corporation.

As the PCAOB nears 20 years of existence it has withstood Constitutional challenges to its structure with the original vision of its progenitors Sen. Paul Sarbanes (D-Md) and Rep. Michael Oxley (R-Ohio), at least on paper, largely in-tact, although the PCAOB has endured its share of recent scandals. The Gensler-led change of board members marks the second presidential administration in a row in which a nearly wholesale change in board membership has occurred.

Attorneys: (Kirkland & Ellis LLP).

Companies: Deloitte & Touche LLP

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