WealthManagement Magazine

NASD Enforcer Departing for the Dark Side

Barry Goldsmith, the NASD’s executive vice president for enforcement, is headed over to the dark side. Goldsmith will be leaving the regulator in March for private practice at the Washington, D.C.-based law firm Gibson Dunn & Crutcher. He will be replaced for the time being by the department’s deputy head, James Shorris.

Barry Goldsmith, the NASD’s executive vice president for enforcement, is headed over to the dark side. Goldsmith will be leaving the regulator in March for private practice at the Washington, D.C.-based law firm Gibson Dunn & Crutcher. He will be replaced for the time being by the department’s deputy head, James Shorris.

“Barry brought, almost single-handedly, a level of prestige and credibility to NASD enforcement that wasn’t there before,” says Jacob Frenkel, a securities attorney with Shulman Rogers Gandal Pordy & Ecker, in Rockville, Md., and a colleague of Goldsmith’s for eight years when they both worked for the SEC. Frenkel adds that while his departure may be welcomed by the broker/dealers that felt his enforcement wrath, his legacy will no doubt continue under Mary Schapiro, who hired him in 1996. (Schapiro is to become chairman and CEO of the NASD in December.)

Before arriving at the NASD, Goldsmith worked as the chief trial lawyer at the SEC. His list of prosecutorial accomplishments included: Drexel Burnham Lambert’s Michael Milken ($1 billion in fines, two years in jail) and Ivan Boesky ($100 million in fines). During his time at the NASD, Goldsmith lead investigations into IPO-allocation practices of firms, research analyst conflicts of interest, brokerage bucket shops, mutual fund share-class abuses and a host of other recent initiatives of the agency.

Goldsmith said in a statement that he was extremely proud of the NASD’s accomplishments in the enforcement area. “Investors and those who rely upon the integrity of our capital market have my colleagues to thank for confronting the difficult enforcement issues we faced with unified purpose, integrity and fairness.”

“I probably would have called Barry Goldsmith overreaching when I was on the ‘dark side,’ ” jokes Hal Degenhardt, a securities attorney with Fulbright & Jaworski in Dallas and a former SEC lawyer who joined the commission as Goldsmith was leaving. “But as a fellow regulator, he was someone for whom I had a great deal of respect.”

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