The Commissioners worked quickly to put the outlines of an agency in place. By July 17 they had created three functional divisions and hired one of the best senior staffs in Washington. James Landis brought his most valuable assistants from the FTC. Donald Montgomery began as head of the Examination Division, while Baldwin Bane became executive administrator. When the Examination Division became the Registration Division, Bane took over. This division examined all of the registration statements filed with the agency and made any necessary recommendations to the Commission. In addition to the usual attorneys and accountants, Bane's staff included financial examiners, mining engineers, and petroleum engineers, among others.
The Trading and Exchange Division was directed by David Saperstein, who had been Pecora's lieutenant during the Senate hearings. Saperstein was highly suited for overseeing the registration of securities brokers and dealers, promulgating rules for practices such as short selling, and detecting unlawful practices.
The Legal Division conducted hearings, prepared orders, transmitted cases to the Justice Department, and provided expert support to the other two divisions. Kennedy named John J. Burns to head this division and act as SEC general counsel. Burns had become a full professor at Harvard Law School at the remarkable age of twenty-nine and sat on the Massachusetts Superior Court at age thirty. Not only was he a friend of Kennedy's but he was also close to Felix Frankfurter. The Frankfurter-Burns connection helped direct sharp young Harvard law students into careers at the SEC.
Also given division chief status was William O. Douglas. "Protective committees" had long been a target of reformers. Bankrupt companies were usually put under a trustee or committee charged with protecting bondholders during reorganization. But some trustees, such as commercial bankers, protected their own interests at the expense of others. The Commission was obligated by statute to investigate this problem, and Douglas, considered by many to be the nation's leading corporate law professor, agreed to take on this Protective Committee study. Douglas also encouraged promising Yale Law School graduates to join the Commission.
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