Mary Jo White to Be Named SEC Head

Econintersect: A veteran prosecutor will be nominated today by President Obama as the next head of the SEC (Securities & Exchange Commission).  Mary Jo White, while currently in private practice as a partner in New York law firm Debevoise & Plimpton, has served as U.S. attorney in Manhattan.  During her nine-year tenure as the first woman to hold the nation’s top prosecution office (the Southern District of New York) White obtained convictions of the leading pre-911 terrorists and also of Mafia boss John Gotti.

White’s name had been circulating in the rumor mill for weeks so the announcement of the nomination, scheduled for 2:30 pm today (24 January 2013), is not a surprise.  White will replace Elisse Walter who succeeded Mary Shapiro who resigned in December.  See GEI News.

Michael Hirsch at National Journal asked if a strong criminal prosecutor would be effective in the SEC which has no criminal prosecutorial authority and can only pursue civil cases.

Econintersect would ask if the ability of an experienced prosecutor to make criminal referrals would be wasted with a Justice Department that has maintained that bringing criminal cases is just too hard.  See GEI News stories about The Untouchables and Lanny Breuer.

USA Today had this to say:

White spent nearly a decade as the U.S. attorney in Manhattan, building a reputation as a tough prosecutor with an expertise in complex securities and financial fraud cases. White House officials say that makes her well positioned to implement Wall Street reform legislation.

White would be responsible for enforcing securitiies laws and for implementing reforms under the Dodd-Frank Act which is restructuring banking and its relationship to Wall Street.

Some have expressed disappointment that Walter will not have longer as SEC chief.  From AdvisorOne:

“Many of us wish that the exceptionally capable Elisse Walter had been given more time to serve as chairman,” Steve Crimmins, a partner with K&L Gates in Washington, who served for eight years as the SEC’s Deputy Chief Litigation Counsel, told AdvisorOne on Thursday. “But without question Mary Jo White is a good choice. White has the ability, high profile and credibility needed to lead the SEC in these challenging times for the agency.”

Others had praise for White.  AdvisorOne had a positive quote from Barbara Roper, director of investor protection for the Consumer Federation of America (CFA).  Additionally from AdvisorOne:

“Mary Jo White was a tough, smart, no nonsense, broadly experienced and highly accomplished prosecutor. She knew who the bad guys were, went after them and put them in prison when they broke the law,” said Dennis Kelleher, CEO Better Markets. “That’s what must happen if integrity and investor confidence is to be restored in our securities markets.”

The new chief has an in-family connection with the SEC.  White’s husband, John White, was a SEC director (Division of Corporation Finance), retiring at the end of 2008.  Yves Smith at Naked Capitalism has suggested that Mr. White’s activities since leaving the SEC have been lobbying against regulation as a partner at Cravath, Swaine & Moore and that could represent a potential conflict of interest.

Naked Capitalism also reported that Neil Barofsky, The former head of the TARP Oversight Committee and an outspoken critic of lax financial crimes prosecution, is enthusiastic about White’s nomination.  See GEI News articles about Barofsky.

John Lounsbury

Sources:

• Obama to Name Mary Jo White New SEC Chief (Melanie Waddell, AdvisorOne, 24 January 2013)

• Mary Jo White has record of tough prosecutions (Julie Pace, Associated Press, USA Today, 24 January 2013)

• After Taking on Terrorists, Can Mary Jo White Handle Tycoons? (Michael Hirsh, National Journal, 24 January 2013)

• Mirabile Dictu! Obama Likely to Nominate Mary Jo White to Head SEC (Yves Smith, Naked Capitalism, 20 January 2013)

• Walter to Head SEC (GEI News, 09 November 2012)