Former Prosecutor Mary Jo White Nominated to SEC Head
12:30 pm, January 25th | by Colette McIntyre
President Obama nominated Mary Jo White, a former U.S attorney, to chair the Securities and Exchange Commission yesterday. If confirmed by the Senate, White would succeed Elisse Walter who has been serving as interim chairwoman since the resignation of Mary Schapiro in December. “You don’t want to mess with Mary Jo,” Obama said at a press conference announcing White’s appointment, alluding to his selection’s illustrious record as a hard-nosed prosecutor.
White would be the SEC’s first former prosecutor — most SEC chairman have been plucked directly from Wall Street or the pools of private securities lawyers. While serving as the U.S Attorney in the Southern District of New York, she led the charge on a number of high-profile cases, including the prosecution of John Gotti and Ramzi Yousef, the mastermind behind the 1993 World Trade Center bombing. White also played an important role in enforcing complex security law: in 2000, she spearheaded one of the biggest crackdowns on securities fraud of its time, criminally indicting more than 100 people accused of coercing brokers and manipulating penny stock prices. At the announcement Obama referred to White’s numerous successful cases as “a pretty good run.”
Obama’s selection of a former prosecutor is seen as a response to the harsh criticism that the SEC didn’t take enough action against those responsible for the financial crisis. (It is also opportune that White is a woman, considering the charges levied against Obama’s “too male” cabinet.) White’s nomination could signal a shift in the SEC’s focus, away from compromise and towards tougher enforcement. Consumer advocates argued that Mary Schapiro’s tenure as CEO of the Financial Industry Regulatory Authority, the securities industry’s self-policing organization, colored her time as SEC head; many believed her time at the FINRA made her preferential to settlements and timid in the face of misconduct. While banks such as Goldman Sachs, JPMorgan Chase, and Citibank were penalized by the SEC under Schapiro’s watch, critics argue that the fines were inadequate and many resent that no senior executives were held responsible for their actions. It is hoped that White’s background in prosecution would help her lead a more aggressive SEC.
Yet White’s history as a prosecutor has its disadvantages: after nine years of serving the Department of Justice, White joined the law firm Devevoise & Plimpton, where she has spent the last decade defending the type of Wall Street titans that will inevitably clash with the SEC in future enforcement cases. During her time as a private litigator, her clients have included former Bank of America Chief Executive Officer Ken Lewis and former Morgan Staney CEO John Mack. In fact, it has been implied that White had a hand in the mysterious disappearance of the SEC’s investigation into insider trading charges involving Mack.
It is hard to assess how White would act as SEC head, as she has served both a prosecutor and a protector of financial institutions. We’ll have to wait for her Senate confirmation to find out.