The Catholic University of America

Securities Law Program Website

SEC Commissioner Troy Paredes

No Snap Judgments When Trillions are at Stake

The implosion of the nation’s financial markets over the past two years has placed the U.S.  Securities and Exchange Commission under closer scrutiny now than perhaps any other time in its 75-year history.

The trillions of dollars in play in the economy are affected by the commission’s decisions, policies and forecasts for the future. No one is more aware of the SEC’s enormous power and responsibility for America’s economic health than its five commissioners.

“Being overconfident about your ability to understand and solve problems is itself a recipe for making the problem worse,” said Commissioner Troy Paredes, who spoke about “Current Issues in Securities Regulation....a Commissioner's Perspective” on Oct. 21 at the invitation of CUA’s Securities Law Program and the Securities Law Students Association.

Four of the current commissioners of the SEC, including Paredes, were sworn into office just 15 months ago. Before joining the agency, Paredes was a tenured professor at Washington University School of Law in St. Louis, Missouri.

He spoke candidly to CUA students, acknowledging that it took some time to appreciate the complexity of the nation’s financial system. Like most federal agencies, the SEC employs many career staff members who can offer expertise, advice and institutional memory to the commissioners at the top. Since SEC commissioners serve only five-year terms, Paredes said smart ones take advantage of staff resources, proceed cautiously, listen carefully and approach the job with humility.

“I can’t see, know or predict everything. These are tough decisions. There are always good arguments for all sides,” he said.

Paredes own extensive background in such subjects as executive compensation, hedge funds, the allocation of control within firms among directors, officers, and shareholders, the psychology of corporate and regulatory decision making and many other aspects of high finance appear to leave him well-equipped to take on the job of an SEC commissioner. Still, he is the first to admit that the leap from classroom theory to the real-life consequences of political power is a large one.

“What we do is no joke. These are highly significant matters,” he concluded.