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U.S. Securities and Exchange Commission

SEC Announces New Division of Risk, Strategy, and Financial Innovation

Professor Henry Hu Named First Director


Washington, D.C., Sept. 16, 2009 — Securities and Exchange Commission Chairman Mary L. Schapiro today announced that University of Texas School of Law Professor Henry T. C. Hu has been named Director of the newly-established Division of Risk, Strategy, and Financial Innovation.

The new division combines the Office of Economic Analysis, the Office of Risk Assessment, and other functions to provide the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The division's responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation.

"This new division will enhance our capabilities and help identify developing risks and trends in the financial markets," said Chairman Schapiro. "By combining economic, financial, and legal analysis in a single group, this new unit will foster a fresh approach to exchanging ideas and upgrading agency expertise."

Chairman Schapiro continued, "I am pleased Professor Hu agreed to accept this leadership role. His vast understanding of the complexities of the markets will be put to good use on behalf of investors as he leads this new division. I welcome Henry to the SEC, and look forward to benefitting from his insightful counsel."

Professor Hu said, "I am honored that Chairman Schapiro has asked me to be the director of this new division at this seminal time. The derivatives revolution, the rise of hedge funds and institutional investors, technological change, and other factors have transformed both capital markets and corporate governance. I look forward to working with the Commission and to using an interdisciplinary approach that is informed by law and modern finance and economics, as well as developments in real world products and practices on Wall Street and Main Street."

The new division will perform all of the functions previously performed by OEA and ORA, along with the following: (1) strategic and long-term analysis; (2) identifying new developments and trends in financial markets and systemic risk; (3) making recommendations as to how these new developments and trends affect the Commission's regulatory activities; (4) conducting research and analysis in furtherance and support of the functions of the Commission and its divisions and offices; and (5) providing training on new developments and trends and other matters.

With the creation of the Division of Risk, Strategy, and Financial Innovation, the SEC now has five divisions, including the Division of Corporation Finance, the Division of Enforcement, the Division of Investment Management, and the Division of Trading and Markets.

Professor Hu holds the Allan Shivers Chair in the Law of Banking and Finance at the University of Texas School of Law and has written on bank, derivatives, hedge fund, and mutual fund regulation, corporate governance, global competitiveness of U.S. derivatives markets, model risk, risk management, and swaps and other financial innovations.

More recently, Professor Hu was the lead author on a series of pioneering articles on the "decoupling" of debt and equity, its impact on corporate and debt governance and world systemic risk, and possible disclosure and substantive responses.

Professor Hu holds a B.S. in Molecular Biophysics & Biochemistry, an M.A. in Economics, and a J.D., all from Yale University.

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Modified: 09/16/2009