SEC's Sokobin Among Guests at 2009 Corporate Law Symposium

Assessing risk.

If there are two words that better describe the reasons behind white knuckles on Wall Street over recent months, they are hard to think of. Risk leads to fear and fear leads to gridlock, the state of affairs in credit markets during the worst days of the current financial crisis.

More than 150 practitioners, academics and students gathered at the University of Cincinnati College of Law on Friday, April 3, for UC’s 22nd annual Corporate Law Symposium, with this year’s topic being “New Models of Regulating the Financial Markets.”

Among the experts offering their views on this topic was one of the nation’s most prominent regulatory voices – Jonathan S. Sokobin, director of the Securities and Exchange Commission’s Office of Risk Assessment.

Sokobin, who has been in his post for just over a year, said his office was created by the SEC in 2004 in the wake of the Enron scandal. “Our goal is to look over the hills and around the corners and identify the next fraud before it arrives,” he said.

Given the complexities of markets described throughout the day’s sessions, that is an unenviable task. Sokobin, explaining comfortably from the lectern like the former college professor he was at Southern Methodist University, said that to navigate terrain so filled with complexity, the key is to identify basics – or, in his words, “first principles” – particularly when it comes to unraveling the overlapping differences between two categories of risk, bank risk versus market risk.

“The first question that needs to be asked is: What needs fixing?,” Sokobin said. “What are the reforms going to be designed to accomplish?”

He pointed those who are wondering exactly how the administration is going to proceed next in taking on the financial crisis back to a set of points put forward in public settings – first, a set of seven principles laid out by President Barack Obama in his February address before Congress, and secondly, testimony on March 26 before Congressional committees by Treasury Secretary Timothy Geithner and SEC Chairman Mary L. Schapiro.

The goal is to come up with an effective strategy that deals with assumptions that were made in the way markets worked that proved incorrect.

“Markets only work when the people supplying capital feel they can enter and leave (the market) when they want and with a fair deal,” Sokobin said.

Friday’s event was coordinated by Barbara Black, the Charles Hartsock Professor of Law at UC and the director of UC’s Corporate Law Center.

Presenters on Friday’s agenda included:

• James D. Cox, Brainerd Currie Professor, Duke University School of Law
• Adam C. Pritchard, Professor, University of Michigan School of Law
• William K. Sjostrom, Jr., Associate Professor, Salmon P. Chase College of Law, Northern Kentucky University
• Roberta S. Karmel, Centennial Professor, Brooklyn Law School
• Jerry W. Markham, Professor, Florida International University
• Lisa H. Nicholson, Professor, Louis D. Brandeis School of Law, University of Louisville
• Olufunmilayo B. Arewa, Associate Professor, Northwestern University School of Law
• Janis Sarra, Professor, The University of British Columbia, Faculty of Law
• Lynn Bai, Assistant Professor, UC College of Law

The full event can be viewed as an archived Webcast at:

Webcast Web page