SEC Exams chief Richard Best takes unexpected medical leave

SEC officials said nothing about the problem that prompted Best's decision, how long he would be out or what other changes his absence might cause

The SEC announced Monday that Division of Examinations director Richard R. Best has taken a medical leave of absence from the agency.

Richard R Best, Director
SEC Div. Examinations

The July 25 announcement did not say what prompted Best to take medical leave, or how long he is likely to be out of commission.

The division’s two deputy directors – Natasha Vij Greiner and Keith E. Cassidy – have been appointed as interim acting co-directors of the Exams division during Best’s absence.

Best has worked at the SEC since 2015, when he took over as regional director of the SEC’s Salt Lake Regional office. He took on two other regional directorships – in Atlanta in 2018 and New York in 2020 – before being appointed acting head of regional director of the agency’s Atlanta office in 2018

Best took over as acting director of Exams in March, 2022 and was named permanent director in May, 2022.

In that role he helped put meat on the bones of the regulatory agenda SEC chair Gary Gensler introduced after his confirmation in early 2021, according to an analysis of the division’s 2023 Examination Priorities by global law firm Baker Botts in February, 2023.

Under Gensler and Best, Exams focused on compliance, risk management and fraud prevention as earlier administrations had done, but added four new areas of focus designed to advance areas covered by new regulatory proposals, including ESG investing, changes in the role of investment advisers and standards of conduct such as Regulation Best Interest the Baker Botts report found.

The Exams division “will emphasize compliance with new SEC rules applicable to investment advisers and investment companies as well as continue our focus on emerging issues and rules aimed at protecting retail investors,” Best said in the Feb. 7 press release announcing the publication of the division’s priorities for the year.

SEC veterans step up to fill in for Best

During Best’s absence, responsibility for the role will fall to Greiner and Cassidy, who were named as deputy directors of Exams in November 2022.

Both are “strong leaders who have earned the respect of their colleagues,” and will continue to fulfill their current managerial roles while filling in as acting co-directors of the division, Gensler said in this week’s announcement of Best’s absence.

Greiner is a 21-year veteran of the SEC with lone experience in examinations, enforcement and litigation.

She started at the agency as a broker-dealer examiner but spent almost a decade investigating and litigating potential violations for the SEC’s Division of Enforcement before moving on to legal- and policy advisory roles in the Division of Trading and Markets.

She currently serves as national associate director of the Investment Adviser/Investment Company (IA/IC) examination program, including the Private Funds Unit and as associate director of the Home Office IA/IC examination program.

Cassidy is a Marine Reserve officer with technical expertise he puts into action as national associate director of the Exams division’s Technology Controls Program – which is handles Regulation SCI examinations – and manages the agency’s CyberWatch program and Cybersecurity Program Office.

He previously worked as director of the SEC’s Office of Legislative and Intergovernmental Affairs – a job he took after giving up a similar role as chief of staff for the Office of Legislative Affairs at the Dept. of Justice and as a legislative assistant in the U.S. Senate.

Exams: Lots of changes at the top

The elevation of Greiner and Cassidy is designed to last only until Best returns from medical leave, but the division has already gone through several interim changes that turned out to be less temporary than they were described when the SEC announced them.

The dominos started to fall with the July, 2021 announcement of the resignation of Peter B. Driscoll, who served as director of the Exams division and its predecessor, the Office of Compliance Inspections and Examinations, since 2017.

He was also the division’s first chief risk and strategy officer, its managing executive and worked as an attorney in the Division of Enforcement, served as chief of a branch office, assistant regional director, recipient of the first-ever Mission Award and the Distinguished Service Award that is the agency’s top internal honor for employees.

Since September of 2021 Driscoll has focused on the financial services sector as a partner at PwC, working out of the company’s National Quality Organization office in Washington, DC.

Daniel S. Kahl – who spent 21 years at the agency and had served as deputy director of the Exams division since 2018 and as its chief counsel since 2016 – was named acting director following Driscoll’s departure, but quit in March, 2022 after just eight months.

The job of deputy director that put Greiner and Cassidy in line to take over as co-acting directors of the division became available – along with Greiner’s gig as head of the IA/IC examination program after the January, 2022 resignation of Kristin Snyder, an 18-year SEC veteran who had led the IA/IC program since 2016 and served as a deputy director since 2018.

Less than two weeks after the SEC announced her resignation, the giant securities-law firm Debevoise & Plimpton LLP announced Snyder would join the firm’s San Francisco office as a partner in the White Collar & Regulatory Defense Group.

The group she joined also included other former SEC officials, including Julie Riewe and Robert Kaplan, who served as co-chiefs of the Division of Enforcement’s Asset Management Unit, former SEC Enforcement director Andrew Ceresney, former Foreign Corrupt Practices Act Unit chief Kara Brockmeyer and Mary Jo White, who served as chair of the SEC from April, 2013 to January, 2017.

The SEC described Best’s absence as temporary but have not responded to questions about the cause of the issue or how long his medical leave is likely to be.

The SEC has also not addressed the question other sources raised about what changes, if any, the industry could expect in the behavior of the Exams division during Best’s absence or whether personnel changes needed to make up for Best’s absence might cause changes of their own that could affect the experience in store for fund advisers or boards undergoing examination.