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Oversight

SEC Fills Key Risk Positions

Gabriel Benincasa is the agency's first CRO; MIT's S.P. Kothari leads the Division of Economic and Risk Analysis

Monday, March 4, 2019

By Ted Knutson

Gabriel Benincasa, an attorney and CPA who has worked in senior roles at CIT Group, Bridgewater Associates and other firms, has been named chief risk officer of the U.S. Securities and Exchange Commission. The appointment was announced on February 28, ten months after SEC chairman Jay Clayton said in congressional testimony that he was seeking “to fill this vital new position,” characterized as “another important step to strengthen our cybersecurity and risk management efforts.”

Julie Ehrhardt, who since last May was acting CRO pending completion of the recruitment process, returns to the Office of the Chief Accountant as deputy chief accountant for technology and innovation. Clayton complimented her “for giving us a running start on this initiative.”

Gabriel Benincasa Headshot
Gabriel Benincasa

Two days before the announcement of the SEC's first agency-wide CRO, S.P. Kothari of Massachusetts Institute of Technology's Sloan School of Management was introduced as director of the Division of Economic and Risk Analysis (DERA). Kothari is the fifth permanent head of that nearly decade-old division. The directorship, which has rotated among academics and comes with the chief economist title, was open since Jeffrey Harris of American University's Kogod School of Business departed in May 2018.

Chyhe Becker, who was serving as DERA's acting director, continues on as deputy director and associate director of litigation economics after winning praise from Clayton for “her exemplary leadership” of the think-tank-like division.

“S.P. brings with him wide-reaching insight from his decades spent as a leader in applying sophisticated research to the operation of our financial markets, including firsthand experience from his time in the private sector,” Clayton said in a statement. “His leadership will guide DERA well in the research and analysis it provides in support of the commission's work on behalf of Main Street investors.”

Professor and Administrator

Kothari is the Gordon Y Billard Professor of Accounting and Finance at the MIT Sloan School of Management and recently completed a six-year term as the school's deputy dean.

According to his faculty biography, Kothari in 2008-'09 was global head of equity research for Barclays Global Investors (BGI), whose actively managed equity portfolio had in excess of $100 billion in assets and a research team of approximately 50 PhDs in San Francisco, London, and Sydney.

Earlier, Kothari was head of MIT Sloan's Economics, Finance and Accounting department, consisting of approximately 75 professors and lecturers and an administrative staff.

His research areas include financial reporting and valuation, asset allocation, international accounting practices, employee-stock-option compensation, evaluating investment performance, and corporate uses of derivatives for hedging and speculation.

S.P. Kothari Headshot
S.P. Kothari

With a B.S in Engineering from the Birla Institute of Technology and Science, MBA from the Indian Institute of Management, and PhD from the University of Iowa, Kothari has been co-chair of the board of governors, Asia School of Business, Kuala Lumpur; faculty director of the MIT-India Program; an editor of the Journal of Accounting & Economics; opinion-article contributor to The Economic Times of India; and a senior consultant with Charles River Associates.

“I am delighted to welcome S.P. to DERA,” Chyhe Becker said. “His warm and thoughtful leadership is an excellent fit for the division and will serve us well in our role in providing economic analysis to help the commission fulfill its mission.”

Kothari said he is “honored to join the SEC's team of dedicated economists, whose work is well-known and respected throughout the discipline. I look forward to working with the staff and the commission to explore the important economic issues affecting investors and our markets.”

It was also announced February 26 that Vanessa Countryman, DERA's chief counsel for the past five years, would be acting secretary of the SEC in place of Brent Fields. He moved to the Division of Investment Management as associate director.

“Experienced Senior Leader”

As chief risk officer, Gabriel Benincasa “will coordinate the SEC's continued efforts to identify, monitor, and mitigate key risks facing the commission. Working within the SEC's Office of the Chief Operating Officer, he will also serve as a key adviser on other matters related to enterprise risks and controls,” the agency said.

Chairman Clayton described Benincasa as “an experienced senior leader with deep risk, legal, compliance, and financial markets expertise. I am certain we will benefit from his advice and insights.”

COO Ken Johnson said, “I look forward to working with Gabe to maintain a robust risk management program at the agency. Gabe's strong background in risk management positions him well to help the SEC continue to evaluate a wide range of current and emerging challenges, whether related to our markets, cybersecurity, or our own operations.”

Benincasa has a bachelor's degree in accounting from Baruch College, a law degree from Fordham University Law School, and FINRA Series 3, 7, and 24 licenses.

He began his legal career at Davis Polk & Wardwell and was most recently director and vice chair of the risk control committee of CIT Group, where he overlapped for several months, in 2015, with co-president Joseph Otting, now the U.S. Comptroller of the Currency.

As was detailed on the website of Patomak Global Partners, where he had been listed as a senior adviser, Benincasa has also been a senior attorney at Bridgewater Associates; deputy general counsel and global head of compliance for Investment Technology Group; deputy global head of operational risk management at Credit Suisse First Boston; and an attorney for the fixed-income divisions of Bank of America and Morgan Stanley.

Benincasa said, “It is an honor to serve America's investors and markets as the SEC's first chief risk officer. I look forward to joining the team and building upon existing programs to help the agency tackle current and future challenges.”




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