This past June, Temple Law’s own Stephanie Avakian was named Co-Director of the U.S. Securities and Exchange Commission’s Enforcement Division. Ms. Avakian, who hails from nearby Vineland, New Jersey, received her bachelor’s degree from The College of New Jersey in 1992 and her J.D. from Temple Law in 1995. Following law school, Ms. Avakian began her legal career at the SEC’s New York Regional Office. In 2000, after serving as both Branch Chief of Enforcement for the New York office and counsel to former SEC Commissioner Paul Carey, Ms. Avakian left her post at the Commission to pursue a career in private practice at Wilmer Cutler Pickering Hale and Dorr LLP, where she represented large financial institutions, public companies, and individuals in a variety of investigations and other matters. In 2014, then a partner and vice chair of the firm’s securities practice, Ms. Avakian left Wilmer Hale to serve as Deputy Director of the SEC’s Division of Enforcement. She remained in that role until December 2016, when she became the Acting Director of Enforcement.
I met with the recently-named Co-Director on a particularly stifling late August afternoon at the Commission’s headquarters in Washington, D.C. after she had agreed to share with The 10-Q’s readers some reflections on her experiences in both the public and private sectors.
Brian Thomas [BT]: In June, you were named Co-Director of the SEC’s Enforcement Division. On behalf of everyone at Temple Law School, congratulations. As of last year, the Enforcement Division had close to 1,400 employees; that’s nearly one-third of the Commission’s staff. Being a talented lawyer is one thing, but having the poise and the confidence necessary to oversee so many professionals is quite another thing entirely. Before we turn to lessons specific to the legal profession, do you have any thoughts about what it means to be an effective leader generally?
Stephanie Avakian [SA]: For some people leadership comes naturally, but others have to learn over time. It didn’t come naturally to me, so I had to work really hard at it. Most importantly, at least in my role, to be a strong leader requires sound decision making skills. I try hard to give people my undivided attention and focus on whatever or whoever is in front of me so that I have the information I need to make an informed decision. I almost never bring my iPhone to a meeting—unless I’m really expecting something that I’ll need to act on immediately. I strive to have people leave our meetings with an answer—or at least a promise that they will receive one in fairly short order. I try not to be a bottleneck. My rule for myself is 24 hours or less.
BT: You began your legal career at the SEC and followed that up with over thirteen years in private practice before returning to the Commission in 2014. What was it like in private practice during the financial crisis, and what was it like returning to the Commission in the post-crisis regulatory environment? Did the crisis have any bearing on your decision to return?
SA: The financial crisis most definitely affected how the SEC operates. I think that the Enforcement Division and the Agency as a whole changed substantially as a result of the financial crisis. The Agency has a much higher profile than it did twenty some years ago when I first started there. It certainly changed the marketplace for private practice as much as it did the SEC. Some of our clients disappeared. I did a lot of work for large financial institutions. Seeing those institutions go through the crisis and come out of it gave me a lot of perspective. You could see the firms’ internal departments—whether compliance, legal, business, what have you—really take on an appreciation for dealing with regulation like they hadn’t in the past. When I came back to the SEC, I really was ready for a change. I was at the right time in my career where I felt like I could leverage the unique perspective I developed in private practice. My experience at the firm gave me some insight into how the Street operates, but also some broader insights into how to think about remedies, outcomes, and litigation issues.
BT: How did your time in private practice influence the approach you take to your current role?
SA: I think that one of the most important things I learned in private practice is that you need to create an environment where people feel like they can tell you stuff; they need to always be able to come in and tell you the bad things. It’s really easy to create an environment where people feel comfortable telling you the good news, but it’s really difficult to create an environment where people feel comfortable telling you the bad news. You want clients to be comfortable telling you about their mistakes so that you can help them respond in a responsible manner. That’s definitely something I brought with me when I transitioned back to the SEC. I think that the environment I try to create here is one in which people truly feel like there’s an open door: I’m never going to get angry with someone or raise my voice; if they have bad news, I’m going to say, “Wow that really stinks. Let’s figure out what to do.”
BT: You spoke earlier about how making decisions in your position is not always easy. I imagine that your decisions aren’t always popular with everyone. How do you get your staff to buy into a decision with which not everyone agrees?
SA: You know, here at the Commission, it’s very interesting. You could easily get wrapped into thinking that success is bringing a case, but it’s not just bringing a case. I try to get people to understand that success here is making good decisions—doing the right thing for the right reason—you know, acting in a way that represents good government. And so success here may be deciding to close a case that people have been working on for two years. That’s a tough decision to make, but I try to reward that behavior because I want people to do the right thing for the right reasons.
BT: It’s impossible to not notice the enthusiasm with which you speak about your job. What is it that keeps you so motivated on a daily basis?
SA: Protecting the investing public really is what makes this job so fantastic. We have the best, deepest, most liquid capital markets in the world, and I think keeping fraud out of them—or doing as much as we can to keep the public understanding that these are safe markets and that we’re doing everything we can to keep them safe—truly provides a sense of purpose. People want to come here and invest in our markets, and they want to raise money here. Part of why people find our markets are so appealing is that we help to provide a generally level playing field. It feels good to be a part of that.
The Editors of The 10-Q thank Ms. Avakian for taking the time to sit down and chat with Brian Thomas. This past summer, Brian (LAW ’18) was a legal intern in the SEC’s Student Honors Program. Prior to law school, Brian worked as a client service supervisor at Brown Brothers Harriman.