The Wall Street Journal reports on the latest Securities and Exchange Commission lawyer to pass through the revolving door:
A Securities and Exchange Commission lawyer who played a key role in the government's crackdown on insider trading in corporate America is leaving the agency for private practice.
Andrew Michaelson, who also served as a special prosecutor for nearly four years during the criminal investigation and trial of Galleon Group founder Raj Rajaratnam, is leaving the securities regulator in May to join Boies, Schiller & Flexner LLP as a partner, where he will counsel clients on matters before the SEC, as well as white-collar defense and civil litigation.
Some earlier coverage on this site of the SEC's revolving door is here, here, here, and here. As has been said here in the past, I'm all for government officials finding productive work in the private sector, and one of FutureOfCapitalism LLC's own favorite lawyers (for corporate work, nothing enforcement related, don't worry) is a former SEC official. So I don't want to be misinterpreted here as being overly critical. Even so, there are some potential problems here involving the risks or perceptions that
1. SEC officials may go easy on targets represented by law firms they hope will turn around and hire them.
2. SEC officials may support burdensome laws and regulations with an eye toward making it necessary for individuals and firms to hire them to navigate the regulations they wrote.
3. Instead of an impartial rule of law, clients who hire former SEC officials (who still have relationships with those still in government) will be favored over those who do not hire former SEC officials.
I'm not accusing Mr. Michaelson of engaging in any of these practices. But as has also been said here in the past, we're approaching the point at which it might actually make significant progress toward closing the federal deficit to apply the Glenn Reynolds anti-revolving door tax of "A 50% surtax on anything earned within five years after leaving the federal government, above whatever the federal salary was."