UPDATE 2-Goldman asset unit hires ex-SEC division head

(Recasts with Donohue confirming appointment, comment,background.)

By Jessica Toonkel

NEW YORK, Oct 8 (Reuters) - Goldman Sachs Group'sasset management unit on Monday named a former head of the U.S.Security and Exchange Commission's investment managementdivision as its deputy general counsel.

Andrew "Buddy" Donohue, who most recently was a partner inthe New York office of Morgan Lewis & Bockius LLP, will joinGoldman Sachs Asset Management effective Nov. 1.

Donohue said he decided to make the change because hebelieves he can make more of an impact in-house. "I like beingpart of the discussions with management about issues andapproaches the firm can take early on," he told Reuters.

Donohue will report to Ellen Porges, general counsel forGoldman Sachs Asset Management.

He was head of the division of investment management at theSEC from May 2006 to November 2010. In his role, he spearheadedan initiative to restrict how much mutual fund companies couldcharge in marketing and servicing fees, known as 12b-1 fees. Theproposal was met with vehement opposition and ultimately neverpassed.

Donohue also led the SEC's examination of how ETFs usederivatives, which is ongoing. Prior to the SEC, Donohue servedas global general counsel for Merrill Lynch Investment Managersand before that as general counsel at OppenheimerFunds.

Goldman Sachs Asset Management has $702 billion in assets,according to the firm's website. The firm's 75 mutual fundsalone have $190 billion, according to Lipper.

(Editing by Leslie Adler)


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