Published on Sep 23rd, 2014 | Posted in Articles

The Securities and Exchange Commission today announced that Rhea Kemble Dignam has been named as senior counsel to the director of the Office of Compliance Inspections and Examinations (OCIE). 

Ms. Dignam will begin her new position when her successor as the regional director of the SEC’s Atlanta Regional Office begins in that position later this fall.  Ms. Dignam joined the SEC as the Atlanta Regional Office director in March 2010. 

“Rhea is a proven and valued member of the Commission and the National Exam Program,” said Andrew J. Bowden, OCIE director.   “I am delighted that she has agreed to serve as senior counsel.” 

Ms. Dignam will focus on communicating examination findings to key stakeholders inside and outside the SEC in furtherance of OCIE’s mission to promote compliance, prevent fraud, inform policy, and identify risks.

Andrew J. Ceresney, Director of the SEC’s Enforcement Division, added, “As ARO regional director, Rhea has been a significant contributor to the SEC’s enforcement program. Under her leadership, the ARO has brought many cases of national significance.”    

Ms. Dignam said, “It has been a privilege to work with the talented staff of the ARO, whose commitment to the mission of the SEC is unflagging.  Their accomplishments in investigations, litigations, examinations, and in defending the interests of investors in bankruptcy proceedings, as well as in conducting outreach about the mission of the SEC to a variety of audiences during the past four plus years have been outstanding.  I thank the front line staff as well as the dedicated members of ARO’s support staff.  I also look forward to joining the National Exam Program at the national level and helping it communicate what it learns as the eyes and ears of the Commission.”

Key enforcement actions brought during Ms. Dignam’s tenure include:

  • In re Alderman et al.  (action against the former members of the board of directors of various Regions Morgan Keegan bond funds, for their failure, among other things, to fulfill their valuation obligations as board members under the Investment Company Act of 1940 with respect to fair valued  securities)
  • In re Morgan Keegan et al. (action against the broker-dealer, the investment advisor, and two individuals, brought in parallel with actions filed by a task force of state regulators and by FINRA, with a resulting aggregate settlement of $200 million in disgorgement and penalties)
  • The series of cases (including SEC v. Lee Farkas) against multiple individuals responsible for the more than $1.5 billion fraud at Colonial Bank
  • SEC v. Bank of America, charging violations in connection with a particular RMBS offering in 2008, and resolved as part of a major global settlement announced in conjunction with the Department of Justice in which the bank would pay a total of $16.65 billion to resolve various investigations brought by DOJ and other federal and state agencies, including the SEC.  (The settlement is subject to court approval.)    
  • In re Bank of America Corporation, charging violations in connection with inadequate disclosures in the bank’s Management Discussion and Analysis (MD&A) about uncertainties regarding the potential financial impact of its mortgage loan repurchase obligations.  The bank admitted its disclosure failures and agreed to pay a $20 million penalty.
  • Two “stand alone” actions (SEC v. McCarthy and SEC v. Cleary, against the former CEO and CFO, respectively, of Beazer Homes) brought under Sarbanes-Oxley Section 304 seeking clawbacks for accounting restatements
  • In re JP Turner, a settled action charging failure to supervise by both the firm and its president and the companion litigated case of In re Bresner et al, against the firm’s executive vice president and three of its former registered representatives. (The administrative law judge found all four had violated the securities laws; the three registered representatives are appealing to the full Commission.)
  • SEC v. Morgan Keegan, in which the Commission prevailed in a trial relating to misconduct in connection with auction rate securities.

During Ms. Dignam’s tenure, the examination staff in the ARO increased and targeted its registrant coverage through increasing utilization of a risk-based approach.  The ARO’s exam program has also been very active in sponsoring and participating in events focused on compliance outreach, as well as industry in-reach.  Broadening and deepening its relationship with other federal and state regulators and FINRA has been another priority of ARO’s exam program.

Prior to joining the SEC in 2010, Ms. Dignam was a principal with Ernst & Young LLP, a vice president and deputy general counsel at New York Life Insurance Company, executive deputy comptroller of New York City, chief assistant district attorney in Kings County (Brooklyn), New York, and served in several roles in the U.S. Attorney’s Office for the Southern District of New York, including as the Executive Assistant U.S. Attorney, chief of the Public Corruption Unit, chief of the Narcotics Unit and a member of the Securities and Commodities Frauds Unit.  Ms. Dignam began her legal career as an associate at the law firm of Davis Polk & Wardwell.  She holds a B.A. from Wellesley College (Phi Beta Kappa) and a J.D. from Harvard Law School.