Mar 09, 2010

"The U.S. Securities and Exchange Commission’s top economist is leaving the agency after Chairman Mary Schapiro merged his office with another and passed short- selling rules that hedge funds said ignored financial analysis.

James Overdahl, whose office reviews potential regulations to determine whether benefits outweigh costs, said in an e-mail today that he will step down March 31 to join NERA Economic Consulting. He joined the SEC in 2007 from the Commodity Futures Trading Commission, where he also served as the top economist.

Republican commissioners cited economic analysis last month as they protested the SEC's new restrictions on short-selling, saying the agency lacked data to show bearish stock bets contributed to the 2008 financial crisis. Kynikos Associates Ltd. President James Chanos, in a news release after the vote, said the SEC disregarded evidence that short-selling boosts liquidity and leads to more accurate stock valuations."

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