The SEC Wants Hedge-Fund, Prop Trading Refugees in New York

Attention displaced hedgies and prop traders: The SEC is eyeing you - as a potential new hire.

The SEC's New York office is adding 18 enforcement positions and 15 slots on its examinations staff, says office head George Canellos. And a new SEC enforcement unit dedicated to asset management firms aims to utilize former hedge fund traders' skills to smoke out compliance issues in complex derivatives-based strategies.

For SEC hiring, Wall Street's downsizing "does allow us to take advantage of great opportunities that haven't always been available," Canellos told an alternative investments summit organized by Reuters this week. Bruce Karpati, co-director of the new asset management enforcement unit, indicated his team needs expertise in fund strategies to peer over the shoulders of funds' internal compliance staffs: "Compliance can only do so much, but some of the strategies go over the heads of compliance officers," Karpati said at the same event, according to Reuters.

They're the latest in a string of SEC officials to detail plans to hire investment professionals along with lawyers and accountants in an effort to strengthen oversight and prosecution capabilities that withered during the Bush administration. President Obama's budget for next year proposes an 11 percent raise in the SEC budget, which would allow the agency to add 334 full-time positions. Enforcement division staff would grow by about 130, a 10.6 percent increase.