(Adds details and comment from James Overdahl, former SEC
By Suzanne Barlyn
April 30 (Reuters) - The Financial Industry Regulatory
Authority (FINRA) has hired a high-ranking U.S. Treasury
Department official to become its first chief economist, the
Wall Street industry-funded watchdog announced on Tuesday.
Jonathan S. Sokobin, currently acting deputy director of
research and analysis in the Treasury Department's office of
financial research, will join FINRA on May 20, according to
FINRA. He will report directly to Richard Ketchum, FINRA's
chairman and chief executive.
His new office will work with FINRA's general counsel and
other departments in developing new rules and analyzing their
potential costs and benefits to the industry and investors.
Sokobin's office will also be involved in reviews of existing
rules, according to FINRA.
The move is part of a broader effort at FINRA to more deeply
scrutinize the potential costs and benefits of securities
industry rules it wants to propose.
The U.S. Securities and Exchange Commission, which must
approve changes to FINRA's rules, wants FINRA to better support
the economic aspects of proposals it submits to the SEC for
review, Robert Colby, FINRA's chief legal officer, said last
The SEC became more concerned about costs and benefits of
industry rules when a federal court, in 2011, threw out an
important part of the Dodd-Frank financial oversight law
involving shareholders' ability to nominate corporate directors,
saying the agency's economic analysis was flawed.
Wall Street's top lobbying group, the Securities Industry
and Financial Markets Association, has also been pushing for
more detailed analyses of the costs of certain rules to the
Sokobin, who received an MBA and PhD in finance from the
University of Chicago, joined the Treasury Department in 2011 as
chief of analytical strategy in the office of financial
research. Earlier, he was acting director of the SEC's division
of risk, strategy and financial innovation. He joined the SEC in
2000 and was named deputy chief economist in 2004.
"I expect he'll do well," said James Overdahl, an economist
in the securities finance practice at NERA, a global business
consultancy. "He has seen all aspects of the SEC's rulemaking
and enforcement agenda," said Overdahl, a former SEC chief
economist from 2007 to 2010. Sokobin was his deputy for part of
Sokobin did not immediately return a call requesting
(Reporting by Suzanne Barlyn in New York, additional reporting
by Sarah N. Lynch in Washington; Editing by Phil Berlowitz and