The Securities and Exchange Commission's top economist is leaving the agency after Chairman Mary Schapiro merged his office with another and adopted short-selling rules that hedge funds said ignored financial analysis.

James Overdahl, whose office reviews potential regulations to determine whether benefits outweigh costs, said in an e-mail Tuesday that he will step down March 31 to join NERA Economic Consulting.

Republican commissioners cited economic analysis last month as they protested the new SEC restrictions on short-selling, saying the agency lacked data to show that bearish stock bets contributed to the 2008 financial crisis.

Overdahl was named chief economist three years ago by Christopher Cox, Schapiro's Republican predecessor. He stopped reporting directly to Schapiro in September after she merged economic analysis with the office charged with spotting emerging risks to financial markets.

Schapiro appointed University of Texas law professor Henry Hu to oversee the combined unit.

Overdahl declined to comment on whether the short-sale rules or the SEC reorganization affected his decision to leave.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.