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SEC member’s vote doesn’t match image

Aguilar thwarted effort to tighten rules for fund

WASHINGTON — Luis A. Aguilar, one of five members of the Securities and Exchange Commission, is generally known as one of the commission’s strongest advocates for tougher oversight of the securities industry. In public statements this year, he has pushed the SEC to be more aggressive, contending the commission was not protecting investors assiduously enough.

But last week, Aguilar derailed one of the most significant current efforts to tighten regulations on the financial industry.

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His opposition to a proposal from the SEC chairwoman, Mary L. Schapiro, intended to improve the safety and soundness of a popular type of money market mutual fund, put Aguilar in lock step with the powerful mutual fund industry, in which he worked as a lawyer from 1994 to 2002. Aguilar’s decision to oppose Schapiro’s plan last week was the third and deciding SEC vote against the proposal.

His public criticisms of the approach taken by Schapiro closely echo those made by the industry in its fierce lobbying effort to scuttle a regulatory plan that had won support from nearly every top financial regulator, including the Federal Reserve chairman, Ben S. Bernanke, and Treasury Secretary Timothy F. Geithner.

It is not uncommon, of course, for regulators to side with the industries they oversee. But Aguilar has been adamant that he is not against prudent reform. He has said instead that he wants to be sure regulators have enough information before they move forward with new rules.

Behind the scenes, though, Aguilar had not requested that additional information, said people briefed on his actions in recent months.

Aguilar also defended his opposition to Schapiro’s plan by noting his discomfort with a recent SEC staff list that showed how many money funds had asked the commission for approval to receive financial support from their parent companies.

The plan hoped to improve the safety and soundness of a popular type of money market mutual fund.

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Aguilar contended the commission ‘‘was never given the chance to assess the staff’s underlying methodology to understand how the list was compiled.’’ But SEC officials said he and the other commissioners received the complete list in early July and that Aguilar had raised no questions about it.

Aguilar did not respond to requests for comment, but last week he said in an interview that he wanted to be sure to fully understand the implications of any changes to avoid the possibility that they would unnecessarily drive investors out of money market funds.

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