New SEC head is a former prosecutor
by Liz Hester
President Obama’s choice of Mary Jo White to head the Securities and Exchange Commission puts a former prosecutor atop the financial watchdog group for the first time in the agency’s history. Obviously, this has far-reaching implications for the business community.
While her name has been floating around for about a week, Obama made it official on Thursday.
The Wall Street Journal says this about White:
The nomination of Mary Jo White marks the first time a former prosecutor has been chosen to lead the Securities and Exchange Commission in its 79-year history. The move could signal tougher policing of Wall Street.
Ms. White is the only woman to serve as U.S. Attorney for the Southern District of New York, an office that tackles some of the country’s biggest financial crimes and acts of terrorism. She became noted for her aggressive pursuit of terrorists.
Senate Democrats praised Ms. White and her credentials, although investor advocates expressed concern that her track record on matters of financial regulation was largely unknown and untested. Senate Republicans said they were reviewing her credentials, though a Republican aide said there appeared to be no major concerns yet with her nomination.
The New York Times played up the prosecutor angle of Obama’s appointments.
The White House delivered a strong message to Wall Street on Thursday, taking the unusual step of choosing two former prosecutors as top financial regulators.
But translating that message into action will not be easy, given the complexities of the market and Wall Street’s aggressive nature.
At a short White House ceremony, President Obama named Mary Jo White, the first female United States attorney in Manhattan, to run the Securities and Exchange Commission. Mr. Obama also renominated Richard Cordray as the director of the Consumer Financial Protection Bureau, a position he has held for the last year under a temporary recess appointment without Senate approval.
With the appointments, the president showed a renewed resolve to hold Wall Street accountable for wrongdoing, extolling his candidates’ records as prosecutors.
Ms. White spent more than a decade as a top federal prosecutor in New York City, overseeing the prosecution of the crime boss John Gotti and those responsible for the 1993 World Trade Center bombing. As an Ohio prosecutor, Mr. Cordray filed lawsuits against Bank of America and the American International Group.
“It’s not enough to change the law,” Mr. Obama said. “We also need cops on the beat to enforce the law.”
Reuters points out that White does have some private sector experience most recently.
Obama warned that the administration will keep Wall Street and banks on a tight leash, continuing the message of a strong liberal agenda he laid out during his inaugural address on Monday.
White does bring balance to the position, having spent her recent years in private practice representing some major players in the financial crisis, including former Bank of America Corp Chief Executive Ken Lewis.
The pick drew praise from both Wall Street and reform advocates, who say White would ably steer the powerful agency that plays a key role in overseeing U.S. financial markets.
And the Bloomberg story pointed out she’s different from the traditional SEC chairs.
The appointment of White will be a departure for the SEC, which has typically been run by lawyers steeped in financial policy-making and the securities industry. Her relative inexperience in those areas, along with her work defending corporate clients including Ken Lewis, the former chief executive officer of Bank of America Corp., could draw criticism from some lawmakers and advocates for investors.
White, 65, was U.S. attorney for the Southern District of New York from 1993 to 2002, and won the conviction of four followers of Osama bin Laden for the 1998 bombings of two U.S. embassies in Africa.
Under her direction, prosecutors won convictions for the 1993 World Trade Center bombing and a failed plot to blow up the United Nations headquarters and other New York landmarks. During that time, she supervised Robert Khuzami, the SEC’s outgoing enforcement director, and George Canellos, his deputy.
“The Obama administration would be sending a message that the SEC will continue to be a tough cop on Wall Street,” Rick Firestone, a former SEC attorney who is now a partner at law firm McDermott Will & Emery, said in an e-mail. “Her extensive experience in private practice gives her balance and a deep understanding of Wall Street and the issues in our capital markets.”
The coverage all pointed out that White will likely be tough on Wall Street, but it remains to be seen. None of the stories pointed out that the SEC is still understaffed and has to continue to wade through implementation of Dodd-Frank financial reforms.
Her resume is great, but it remains to be seen how well she’ll be able to enforce the new rules.