Lawyer Diaries: Interview with SEC Chairman

The following Lawyer Diary comes in the form of an interview with David S. Ruder. He's a former Chairman of the Securities and Exchange Commission. This interview is excerpted from Learning From Precedent.

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Bloch: What was it like being the Chairman?

Ruder: Being Chairman of the SEC was, to use modern vernacular, a 24/7 job. I remember when I went into the office for the first time, I asked, “How much vacation do I get?” My staff looked at me and said, “Mr. Chairman”—that name gets to be very exciting—“Mr. Chairman, you work all the time! You can take all the vacation you want, but you’ll always be working!” Indeed, in my time as a lawyer, professor, dean, and Chairman, I have tended to work very hard.

My work at the SEC was extremely exciting, but one thing that I was not well prepared for was dealing with the press. The newspapers were the main mode of communication back in the ‘80s. I found that the press was not very friendly. Members of the press always wanted to know more, regardless of what you wanted to tell them, and they were always looking for things that were wrong.

As far as the press is concerned, that part of the job hasn’t changed. The press doesn’t always report accurately on what happens, and sometimes you even think that there is bias in the reporting. I had to learn to be very, very careful with the press and not say the wrong thing, or say too much, so I would not be misreported. It was a great wake-up call for me.


Bloch: Having been in academia, the public sector, and the private sector, which do you enjoy the most?

Ruder: Enjoy is a particularly interesting word. The most exciting, all-encompassing position I’ve ever had was Chairman of the SEC. You are totally immersed intellectually. You’re working with a group of dedicated people toward a common objective: the public good, protecting the markets and investors.

You have a chance to affect outcomes. The SEC is an independent regulatory agency. All of the commissioners are nominated by the President and confirmed by the Senate. They cannot be easily removed by the President, so essentially they are independent of the White House. The President doesn’t call the SEC Chairman to tell the SEC what to do. On the other hand, the SEC must persuade both the President and Congress to provide an adequate budget, so it’s not entirely independent. Nevertheless, the SEC has great autonomy in getting things done.

It’s quite different than academia. As a professor, it’s a thrill to teach students and to be appreciated by them. You’re excited about the law and write scholarly articles, but you don’t have an immediate effect on events. In my time at the SEC, we had to deal with the stock market crash and enforcement cases, including insider trading and financial fraud. We had to interact with the international world and we had to ensure that corporations were providing information to the public. It was a heady time in terms of the ability to accomplish things. It was really the best time in my life.

The SEC was a very, very hard job. I was exhausted when I came out. I was happy enough to leave, although my time had been wonderful. Because I was Chairman of the SEC, I have had a number of fascinating pro bono public interest assignments. I was a member of the Board of Governors of the National Association of Securities Dealers—now called FINRA—one of the self-regulators of the securities markets. I became a member of the Financial Accounting Foundation which oversees promulgation of Generally Acceptable Accounting Principles [GAAP] in the United States. I became a member of a similar foundation in London, where we oversaw the creation of international accounting standards. Then I became founding chairman of the Securities and Exchange Commission Historical Society, which chronicles the history of the SEC. Most recently I’ve been the founding chairman of the Mutual Fund Directors Forum, which provides education to independent directors of mutual funds.

My SEC experience led to a lot of other work and to a very interesting post-SEC life. I’ve been lucky to continue to be very active intellectually.


Bloch: Do you have any additional advice for students hoping to become the future Chairman of the SEC?

Ruder: You can aspire to be the SEC chairman, but life doesn’t work in a straight line. My advice for a student is to work hard. Do as many intellectual things as you like to do and as well as you can. Put one foot in front of the other and see where life leads you.

At the same time, I think it’s important that one learns how to have regard for other people. You need to understand that every person in life is important. You have to respect others’ values. I think getting along in business or government requires that understanding. Most important, as I tell my children, I believe the number one path to happiness and success is honesty and integrity. If you are honest and tell the truth, people will respect you and they will trust you. Believe me, trust is extremely important in life.

So, my advice for students is to work hard, do what you’re interested in, be honest, and follow what life gives you. There will be opportunities that come. I rarely turned down an offer to participate in a meeting or give a speech. That led to being invited to do other things, including being invited to be Chairman of the SEC. Success in one space gives you momentum toward something else. Reputational progress that you gain by being honest, working hard, and doing a good job will follow you everywhere.