Financial bonanza

Massachusetts’ top securities regulator has sparked fear in some big banks and fund firms, as local investors often laud him as a white knight.

Elected 14 years ago, William Francis Galvin is making headlines this summer for fighting fraud and winning settlements against some of Wall Streets biggest players in a widening probe into whether banks sold securities that were riskier than advertised.

The 57-year-old trained lawyer and lifelong public servant is known for logging long hours as the state’s third-ranked constitutional officer. Besides enforcing securities laws for the state, he also oversees its elections, heads its historical commission, runs its book shop, and stands in for the governor from time to time.

In an interview, Galvin is as passionate about rescuing historic buildings as stopping unscrupulous financial advisors accused of cheating older people.

But it is his crackdown on Wall Street’s handling of auction-rate securities markets and settlements against Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research, Stock Buzz), and UBS AG (UBSN.VX: Quote, Profile, Research, Stock Buzz) that have cemented his reputation as a tough but fair regulator and brought him attention from outside the state, industry observers said.

The Wall Street Journal has turned his picture into one of its famous stippled pen-and-ink portraits cash advance flexible payments. Regulators around the country and top Wall Street lawyers have his number on speed dial.

Galvin says he wants to protect thousands of investors who thought they had cash-like securities but suddenly found they were unable to cash out when auctions broke down in January. His work on their behalf may tee him up for a bigger job.

“He does his job very well here and that means he could do another job very well, too,” said Boston University law professor Tamar Frankel. “I wouldn’t be surprised if he were named as head of the Securities and Exchange Commission or some other agency.” 

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Filed under: economics by Pascal