There is more upheaval among personnel within the SEC's Division of Investment Management, the unit empowered to regulate mutual funds.
In a rather abrupt departure, Kenneth Domingues voluntarily quit his post as the division's chief accountant on April 9. He had held that title a mere six months. Domingues was originally hired to replace Larry Friend, who had been the division's chief accountant for 28-years. Domingues, 66, came out of retirement in October, 1998 expressly to develop and execute the regulator's accounting and auditing policies and procedures by which mutual funds must abide.
Though an SEC spokesperson confirmed Domingues' departure, he declined to provide specific details or information as to whether Domingues had left the SEC for a position in the corporate world. Friend left in February, 1998 to become a partner with what is now PricewaterhouseCoopers's investment management practice in Washington, D.C. Friend worked for the former Coopers& Lybrand before joining the SEC.
Domingues, a certified public accountant, had officially retired in 1997 after working for 10 years in various capacities for Franklin Resources, the investment management firm in San Mateo, Calif.. He was most recently Franklin's chief financial officer and treasurer. Prior to 1986, Domingues was an audit partner for 26 years with then Coopers & Lybrand. When Domingues joined the SEC, he relocated to Washington from San Francisco, where his wife remained.
Domingues could not be reached for comment. But the departure arose from the frustrations inherent in serving as the SEC's top mutual fund accountant, said accountants familiar with the situation. Well-intentioned individuals who are chosen because of their ability to offer the SEC fresh ideas and who have the energy to forge ahead with their own agendas can become quickly disillusioned, said one industry accountant.
It is easy to become frustrated by a slower moving system layered with lawyers, said former chief accountant Larry Friend. There is a fundamental difference between the SEC and the corporate accounting world that can produce tensions, he said.
"They have to understand it is a government organization, not a business organization," said Friend, referring to accountants who work for the SEC. "It takes the type of individual who has been around to know how to work within that framework."
Domingues departure is disappointing, said Paul Kraft, former assistant chief accountant who worked with Domingues but left in February to become a partner in the investment management services group at Deloitte & Touche's Boston office.
"It restarts the learning curve," Kraft said.
While the SEC will post the job opening for a new chief accountant and begin considering candidates over the next several weeks or months, a new assistant chief accountant has been chosen and is slated to assume his post on April 26. Brian Bullard, who spent six years in the Los Angeles office of PricewaterhouseCoopers before transferring two years ago to the firm's Kansas City office to better service a large mutual fund group, will join current assistant chief accountant John Capone. Capone and Kraft simultaneously signed on as assistant chief accountants in June, 1996. Capone joined the SEC from then Coopers & Lybrand. Kraft previously worked for Arthur Anderson.