Companies in Crisis: Will The WorldCom Workout Work For Others?
Mr. Breeden draws from his experience as Corporate Monitor of WorldCom, Inc. to highlight the issues of corporate governance and ethics and recommend new systems of corporate governance and compensation.
Restoring Investor Confidence
In this speech, Mr. Breeden highlights strategic methods and alternatives for reviving troubled companies in the eyes of employees, investors and consumers.
Richard Breeden is a graduate of Stanford University and the Harvard Law School. For 12 years, he served in a series of public policy roles during the Presidencies of Ronald Reagan, George Bush (41) and Bill Clinton. Since leaving public office, Mr. Breeden has worked on many of the most important issues affecting U.S. capital markets, restructuring of failed companies, and the balance of regulation and private entrepreneurship. He is a longtime astute observer of the patterns of regulation in the U.S. economy generally, and by the SEC in particular.
After an early career practicing corporate law in New York, Mr. Breeden joined the Reagan Administration in 1981. Soon thereafter, he became Deputy Counsel to then-Vice President George H.W. Bush (41), with whom he remained close until his death in 2018. Initially, Mr. Breeden assisted in efforts to control excessive federal regulation across the economy being spearheaded by then Vice President Bush. After Mr. Bush became President, he appointed Mr. Breeden to serve as Assistant to the President in the White House, where he was one of the President’s top advisors on economics and finance. Mr. Breeden was the principal architect of President Bush’s hugely successful legislative program to restructure the U.S. savings and loan industry, which eliminated the risk of a financial system meltdown as later occurred in 2008. He also helped coordinate the response to the Exxon Valdez oil spill and other domestic issues.
In late 1989, President Bush nominated Mr. Breeden to serve as the 24th Chairman of the Securities and Exchange Commission. Following unanimous confirmation by the U.S. Senate, he served as SEC Chair for nearly four years.
At the SEC, Breeden was an advocate of strong enforcement of securities laws, while also reducing regulatory burdens on competition and innovation and eliminating ineffective or unnecessary rules. Under his leadership the Commission streamlined accounting, disclosure and corporate governance rules, while taking steps to enhance trading market resilience and overall market integrity. Mr. Breeden also led the SEC’s efforts to promote global capital markets and cooperation among regulators worldwide. Above all, Chairman Breeden kept the SEC out of politically driven activities, focusing instead on the Commission’s role in promoting a strong economy through efficient investment markets.
In private life, Mr. Breeden has helped restructure several companies that faced extinction due to ethical or financial meltdowns. He has served as a consultant to many companies on risk management and corporate governance practices. He has served as an independent director with more than 16 companies in a wide variety of industries. He has also been a bankruptcy trustee or corporate monitor working to restructure failed companies for the benefit of investors and employees. For nearly a decade, Mr. Breeden ran an investment fund with nearly $1.6 billion in assets under management, where he took major stakes in over 60 companies. He has also been brought into numerous troubled situations by courts, government agencies, management teams or boards. These engagements have included handling the restructuring of WorldCom, then the largest U.S. bankruptcy due to fraud, and helping the accounting firm KPMG survive prosecution for its involvement in tax shelter frauds.
In addition to his investing activities, over the past 20 years Mr. Breeden has assisted the Department of Justice and the SEC in running funds to benefit victims of unlawful conduct at companies including Madoff Securities, WorldCom, Enron, British Petroleum, GE and many others. Mr. Breeden and his team created the $4.2 billion Madoff Victim Fund, and in that case they have paid nearly 40,000 victims an 81% recovery. In total Mr. Breeden has paid nearly $9 billion to over 1.6 million victims of securities fraud, often helping restore lives shattered by severe financial losses.
Mr. Breeden currently serves as Audit Committee chair for STERIS plc, a $23 billion market cap medical device manufacturer listed on the New York Stock Exchange. He is also a Trustee of the George and Barbara Bush Foundation and serves on the Board of Overseers of the Hoover Institution at Stanford University. In 2016, he was awarded the William O. Douglas Award by the Association of SEC Alumni for lifetime achievements for investors.
Mr. Breeden is an optimist who believes in the continuing power of American idealism and values to create a safer and more prosperous world.