Gary Brown has a unique vantage on the effort to reform the financial system. A Baker Donelson shareholder who focuses on securities and corporate governance, Brown is currently working for the Senate’s Permanent Subcommittee on Investigations as it plums the depths of the financial meltdown.

Q: In some ways the accounting manipulation at Lehman Brothers is reminiscent of what went on at Enron. Is that shocking in a post-Sarbanes-Oxley climate?

A: Back in 2002, I was actually working here for the Senate on the Enron investigation. We looked into six groups that had oversight responsibility for Enron: credit-rating agencies, investment banks, auditors, boards of directors, securities analysts and then finally government agencies. All of those groups ultimately got additional regulations, except two: investment banks and credit-rating agencies. You can lay a lot of the blame of the current financial crisis squarely at the feet of those two groups. So the first question is, as much as people complained about Sarbanes-Oxley, did it go far enough?

Q: There’s an awful lot of financial system reform pending at the moment. Is that gap something that is going to be front and center in any new legislation?

A: Well, certainly additional regulation on the investment banks will be. As far as the bills that are currently pending in the House and Senate, I can’t tell you. I gave up predicting what the laws would look like a long time ago.

Q: What exactly is your subcommittee looking at?

A: We have a series of hearings scheduled. We’re going to look at case studies on Washington Mutual, some of the investment banks and credit rating agencies, as well as some of the regulators. Whether it makes its way into any legislation will be up to some other committee. Senator Dodd’s bill is going to be more focused on the banks–the FDIC, the traditional banks as opposed to the investment banks.

Q: How did you get involved?

A: Senator Levin, who is chairman of the subcommittee, asked if I would basically act as a consultant to the committee for the next couple of months while they put on these hearings and to help them spare it out to securities and related issues. A lot of the folks on this subcommittee are the same people I worked with back in 2002. It’s a terrific committee and it’s very bi-partisan. I’m about as Republican as you get, and I was hired by the Democrats. I’m pleased to be a part of it.