Linda Chatman Thomsen
Encyclopedia
Linda Chatman Thomsen was the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission from 2005 until early 2009. Since arriving at the SEC in 1995, she has worked under four SEC Chairmen: Arthur Levitt
, Harvey Pitt
, William H. Donaldson
, and Christopher Cox. William Donaldson named her Director of the Division of Enforcement on May 12, 2005. Linda Thomsen is known for her role in the suits by the SEC against Enron
and Martha Stewart
, and for not having investigated Bernard Madoff
. She succeeded Stephen M. Cutler
.
Thomsen is married to Steuart Hill Thomsen, a partner in the law firm Sutherland Asbill & Brennan LLP, whose clients include hedge funds, broker-dealers, & investment advisor
s for securities enforcement matters.
and her law degree from Harvard Law School
.
Before joining the staff of the Commission, she was in private practice at the law firm of Davis Polk & Wardwell
in Washington, D.C., and New York, and also served as an Assistant United States Attorney
for the District of Maryland. In November 2004, Linda Thomsen was identified by writers and editors of the Wall Street Journal as one of fifty “Women to Watch”.
Thomsen is also marked by her adept historical and literary references, as well as humorous self-deprecations; in one speech, she orates: "I should begin of course where I always do — with a disclaimer. My views are my own and do not necessarily reflect the views of the Commission or any other member of the staff. That's the official disclaimer. I have an additional, more personal disclaimer. My views are affected by my view".
, SEC inspector general, recommended that a disciplinary action be commenced against Thomsen due to her role in an insider-trading investigation of a prominent hedge fund known as Pequot Capital Management
.
At the time the SEC refused to take any enforcement action against Pequot and closed the case in 2006. It has recently reopened the case after new information came to light. The hedge fund,
which has now closed, has denied any wrongdoing.
subcommittee including Linda Thomsen SEC enforcement director, acting General Counsel
Andy Vollmer
, Andrew Donohue, Erik Sirri, and Lori Richards and Stephen Luparello of the Financial Industry Regulatory Authority
(FINRA). The subject of the hearings was the question as to why the SEC had failed to act when Harry Markopolos
, a private fraud investigator from Boston, alerted the SEC detailing his persistent and unsuccessful efforts to get the SEC to investigate Bernard L. Madoff, beginning in 1999. Vollmer claimed executive privilege
in declining to answer some questions. Subcommittee chairman Paul Kanjorski asked Mr. Vollmer if he had obtained executive privilege from the U.S. attorney general. “No ... this is the position of the agency,” said Vollmer. "Did the SEC instruct him not to respond to questions?" Mr. Kanjorski asked. Vollmer replied that it was the position of the Commission and that “the answer is no.”
Thomsen and her colleagues testifying were accused by Representative Paul E. Kanjorski
of "refusing to cooperate with a branch of government that could wipe their entire agency off the regulatory map, if necessary." Representative Gary L. Ackerman, went further saying: “We thought the enemy was Mr. Madoff. I think it is you.”
On February 9, 2009, five days after her appearance before the House subcommittee, the SEC announced that Thomsen will resign from her position with no replacement identified and return to the private sector. The SEC announced Vollmer "plans to leave the Commission and return to the private sector," 9 days after Thomsen resigned. On July 9 The Washington Post
announced that Richards would resign to "take on new challenges."
On April 13, 2009, the law firm, Davis Polk & Wardwell
announced that Thomsen was returning to the firm as a partner in the Washington, D.C. office along with former Assistant to President Bush and White House Staff Secretary, Raul F. Yanes. The pair were recruited to work on white collar defense and government investigations and enforcement and increase the firm’s financial regulatory practice.
which discussed an investigation into a Senior Officer of the SEC who provided inside information to a former official but did not name the officer.
The New York Times identified this Senior Officer as Thomsen in an article on December 1, 2009 and that the former official was her former boss, Stephen Cutler of JPMorgan Chase, amid the bank’s negotiations to buy Bear Stearns
in March 2008. The inspector general said that while "Ms. Thomsen’s communication with Mr. Cutler did not violate the SEC’s policy on external communications, she should have taken other steps 'to avoid an appearance of impropriety stemming from the relationship.'"
Arthur Levitt
Arthur Levitt, Jr. was the twenty-fifth and longest-serving Chairman of the United States Securities and Exchange Commission from 1993 to 2001. Widely hailed as a champion of the individual investor, he has been criticized for not pushing for tougher accounting rules. Since May 2001 he has been...
, Harvey Pitt
Harvey Pitt
Harvey Pitt was the 26th chairman of the U.S. Securities and Exchange Commission , serving from 2001-2003. He led the SEC in restoring the U.S...
, William H. Donaldson
William H. Donaldson
William Henry Donaldson was the 27th Chairman of the U.S. Securities and Exchange Commission , serving from February 2003 to June 2005...
, and Christopher Cox. William Donaldson named her Director of the Division of Enforcement on May 12, 2005. Linda Thomsen is known for her role in the suits by the SEC against Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
and Martha Stewart
Martha Stewart
Martha Stewart is an American business magnate, author, magazine publisher, and television personality. As founder of Martha Stewart Living Omnimedia, she has gained success through a variety of business ventures, encompassing publishing, broadcasting, and merchandising...
, and for not having investigated Bernard Madoff
Bernard Madoff
Bernard Lawrence "Bernie" Madoff is a former American businessman, stockbroker, investment advisor, and financier. He is the former non-executive chairman of the NASDAQ stock market, and the admitted operator of a Ponzi scheme that is considered to be the largest financial fraud in U.S...
. She succeeded Stephen M. Cutler
Stephen M. Cutler
Stephen M. Cutler is a lawyer and was the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission from 2001 until 2005. He spent most of his career at the law firm Wilmer Cutler Pickering Hale and Dorr, and became General Counsel of JPMorgan Chase in February, 2007....
.
Thomsen is married to Steuart Hill Thomsen, a partner in the law firm Sutherland Asbill & Brennan LLP, whose clients include hedge funds, broker-dealers, & investment advisor
Investment Advisor
The term Investment Advisor is an individual or firm who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities...
s for securities enforcement matters.
Career history
Thomsen received her A.B. from Smith CollegeSmith College
Smith College is a private, independent women's liberal arts college located in Northampton, Massachusetts. It is the largest member of the Seven Sisters...
and her law degree from Harvard Law School
Harvard Law School
Harvard Law School is one of the professional graduate schools of Harvard University. Located in Cambridge, Massachusetts, it is the oldest continually-operating law school in the United States and is home to the largest academic law library in the world. The school is routinely ranked by the U.S...
.
Before joining the staff of the Commission, she was in private practice at the law firm of Davis Polk & Wardwell
Davis Polk & Wardwell
Davis Polk & Wardwell LLP is an international law firm. The firm employs more than 800 attorneys worldwide and is headquartered in New York City. The firm represents many of the world's largest companies and leading financial institutions, and is best known for its corporate and litigation...
in Washington, D.C., and New York, and also served as an Assistant United States Attorney
United States Attorney
United States Attorneys represent the United States federal government in United States district court and United States court of appeals. There are 93 U.S. Attorneys stationed throughout the United States, Puerto Rico, the U.S. Virgin Islands, Guam, and the Northern Mariana Islands...
for the District of Maryland. In November 2004, Linda Thomsen was identified by writers and editors of the Wall Street Journal as one of fifty “Women to Watch”.
Thomsen is also marked by her adept historical and literary references, as well as humorous self-deprecations; in one speech, she orates: "I should begin of course where I always do — with a disclaimer. My views are my own and do not necessarily reflect the views of the Commission or any other member of the staff. That's the official disclaimer. I have an additional, more personal disclaimer. My views are affected by my view".
Pequot Capital Management insider trading and firing of SEC investigator
In 2008 H. David KotzH. David Kotz
H. David Kotz is the Inspector General of the U.S. Securities and Exchange Commission since his appointment on December 5, 2007...
, SEC inspector general, recommended that a disciplinary action be commenced against Thomsen due to her role in an insider-trading investigation of a prominent hedge fund known as Pequot Capital Management
Pequot Capital Management
Pequot Capital Management was a multi-billion dollar hedge fund sponsor founded in 1998 by Arthur J. Samberg that was forcibly terminated by order of the Securities and Exchange Commission in 2010. The firm's investment funds invested in a range of markets through a variety of strategies...
.
"Kotz said he found there were 'serious questions' about the impartiality and fairness of the SEC's investigation of Pequot. A former SEC attorney who worked on the probe and was fired by the agency has alleged there was political interference in the probe by agency officials."
At the time the SEC refused to take any enforcement action against Pequot and closed the case in 2006. It has recently reopened the case after new information came to light. The hedge fund,
which has now closed, has denied any wrongdoing.
Madoff fraud
Leaders of the U.S. Securities and Exchange Commission (SEC) testified on February 4, 2009 before the United States House Committee on Financial ServicesUnited States House Committee on Financial Services
The United States House Committee on Financial Services is the committee of the United States House of Representatives that oversees the entire financial services industry, including the securities, insurance, banking, and housing industries...
subcommittee including Linda Thomsen SEC enforcement director, acting General Counsel
General Counsel
A general counsel is the chief lawyer of a legal department, usually in a corporation or government department. The term is most used in the United States...
Andy Vollmer
Andy Vollmer
Andrew Neill Vollmer is an American lawyer, currently a partner in the securities department at law firm WilmerHale. Prior to April 2009, he had been Deputy General Counsel for the United States Securities and Exchange Commission and acting General Counsel...
, Andrew Donohue, Erik Sirri, and Lori Richards and Stephen Luparello of the Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
(FINRA). The subject of the hearings was the question as to why the SEC had failed to act when Harry Markopolos
Harry Markopolos
Harry M. Markopolos is a former securities industry executive and independent financial fraud investigator for institutional investors and others seeking forensic accounting expertise. He has received public acclaim for uncovering evidence over a period of nine years that Bernard Madoff's wealth...
, a private fraud investigator from Boston, alerted the SEC detailing his persistent and unsuccessful efforts to get the SEC to investigate Bernard L. Madoff, beginning in 1999. Vollmer claimed executive privilege
Executive privilege
In the United States government, executive privilege is the power claimed by the President of the United States and other members of the executive branch to resist certain subpoenas and other interventions by the legislative and judicial branches of government...
in declining to answer some questions. Subcommittee chairman Paul Kanjorski asked Mr. Vollmer if he had obtained executive privilege from the U.S. attorney general. “No ... this is the position of the agency,” said Vollmer. "Did the SEC instruct him not to respond to questions?" Mr. Kanjorski asked. Vollmer replied that it was the position of the Commission and that “the answer is no.”
Thomsen and her colleagues testifying were accused by Representative Paul E. Kanjorski
Paul E. Kanjorski
Paul E. Kanjorski is the former U.S. Representative for , serving from 1985 until 2011. He is a member of the Democratic Party.The district includes the cities of Scranton, Wilkes-Barre, and Hazleton, as well as most of the Poconos....
of "refusing to cooperate with a branch of government that could wipe their entire agency off the regulatory map, if necessary." Representative Gary L. Ackerman, went further saying: “We thought the enemy was Mr. Madoff. I think it is you.”
On February 9, 2009, five days after her appearance before the House subcommittee, the SEC announced that Thomsen will resign from her position with no replacement identified and return to the private sector. The SEC announced Vollmer "plans to leave the Commission and return to the private sector," 9 days after Thomsen resigned. On July 9 The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...
announced that Richards would resign to "take on new challenges."
On April 13, 2009, the law firm, Davis Polk & Wardwell
Davis Polk & Wardwell
Davis Polk & Wardwell LLP is an international law firm. The firm employs more than 800 attorneys worldwide and is headquartered in New York City. The firm represents many of the world's largest companies and leading financial institutions, and is best known for its corporate and litigation...
announced that Thomsen was returning to the firm as a partner in the Washington, D.C. office along with former Assistant to President Bush and White House Staff Secretary, Raul F. Yanes. The pair were recruited to work on white collar defense and government investigations and enforcement and increase the firm’s financial regulatory practice.
Second instance of insider information
On November 30, 2009, Kotz released a semiannual report to CongressUnited States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
which discussed an investigation into a Senior Officer of the SEC who provided inside information to a former official but did not name the officer.
The New York Times identified this Senior Officer as Thomsen in an article on December 1, 2009 and that the former official was her former boss, Stephen Cutler of JPMorgan Chase, amid the bank’s negotiations to buy Bear Stearns
Bear Stearns
The Bear Stearns Companies, Inc. based in New York City, was a global investment bank and securities trading and brokerage, until its sale to JPMorgan Chase in 2008 during the global financial crisis and recession...
in March 2008. The inspector general said that while "Ms. Thomsen’s communication with Mr. Cutler did not violate the SEC’s policy on external communications, she should have taken other steps 'to avoid an appearance of impropriety stemming from the relationship.'"
External links
- Thomsen bio from USCC.gov