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DANIEL GALLAGHER: Thank you, Ben [Indek], for that kind introduction. I am truly honored to be here tonight to deliver the 15th Annual A.A. Sommer Lecture. It is a particular honor to deliver this lecture in the presence of Al's family. In addition to serving as an SEC Commissioner during a particularly trying time, A1 Sommer played an impressively wide range of roles over the course of his career. To name just a few, he was Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants, the SEC Advisory Committee on Corporate Disclosure, and the America Bar Association Section of Business Law, and he was the Vice Chairman of the NASD.
The one theme that resonated throughout Al's storied career - well, other than being a glutton for punishment - was an unparalleled dedication to the principles that form the tripartite mandate of the SEC: the maintenance of fair, orderly, and efficient markets, the facilitation of capital formation, and investor protection. This dedication was always evident in his indelible and tremendously positive contributions to the field of securities regulation and explains why, four decades after his service on the Commission and a dozen years after his passing, we gather every year to honor his legacy.
Al was not partisan, nor was he a mere bureaucrat. He was a principled, passionate, and tremendously sophisticated advocate for both investors and the growth-promoting, job-creating capital markets, and he did not see any contradiction in that. He knew that strong, fair, and transparent markets that aid capital formation benefit both the individual investor and our economy as a whole. He was, in short, the paradigm of a dedicated public servant, and though I never had the good fortune to meet him, he represents to me everything a Commissioner should strive - and that I do strive - to be.
As many of you are aware, 2014 marks the SEC's 80th anniversary. Tonight, I'd like to discuss a topic that I believe would have been of critical interest to A1 Sommer: the future - the next 80 years - at the SEC. Over the next eight decades, the SEC's fate will be intertwined, as it always has been, with that of our capital markets. Despite robust market activity over the last few years, the U.S. capital markets, the manner in which they are regulated, and the SEC itself collectively face an existential threat: the encroaching imposition of so-called prudential regulation on markets wholly unsuited to that regulatory paradigm. To put it simply, the manner in which the Commission responds to this encroachment, as well as to the unprecedented, decade-long burden placed upon us by a hundred Dodd-Frank Act mandates,2 will determine whether the SEC remains as relevant in the 21st century as it was in the 20th - and more importantly, whether our capital markets, still the best in the world despite an onslaught of self-inflicted frictions, can continue to be the drivers of economic growth and prosperity that they have been for so long.