Skepticism on the New SEC Pick

It was announced today that they have decided upon a formal replacement for SEC Chief – none other than Mary Jo White. Who, exactly, is Mary Jo White, and why are people getting excited? Well, her appointment, along with the reappointment of Richard Cordray to the Consumer Financial Protection Bureau, is supposed to be a message about taking white collar criminals to task. The New York Times reports:

President Obama is tapping Mary Jo White, a former United States attorney turned white-collar defense lawyer, to be the next chairwoman of the Securities and Exchange Commission, according to the White House.

Mr. Obama is set to announce the nomination at the White House on Thursday afternoon at 2:30. As part of the event, the White House will also renominate Richard Cordray to lead the Consumer Financial Protection Bureau, a role he has held for the last year under a recess appointment.

In its choice of Ms. White and Mr. Cordray, the White House is sending a signal about the importance of holding Wall Street accountable for wrongdoing. Both are former prosecutors.

Regulatory chiefs are often market experts or academics. But Ms. White, now a partner at Debevoise & Plimpton, spent nearly a decade as United States attorney in New York, the first woman named to this post. Among her prominent cases, she oversaw the prosecution of the mafia boss John Gotti as well as the people responsible for the 1993 World Trade Center bombing.

As the attorney general of Ohio, Mr. Cordray made a name for himself suing Wall Street companies in the wake of the financial crisis. He undertook a series of prominent lawsuits against big names in the finance world, including Bank of America and the American International Group.

But does this mean the SEC will get more aggressive in pursuing cases in the financial world? Not necessarily. The National Journal did a breakdown of Ms. White’s high profile cases of the past, and while her prosecutorial achievements are impressive (Osama Bin Laden makes the list), her legal experience in finance is itemized with the defense of the people she’s now being charged with regulating – cases like defending Bank of America’s Ken Lewis against securities charges. Maybe, possibly, this means she knows the tactics the other side would use, and could more effectively prosecute them… but we’ve seen cronyism in play on this level before, so we won’t be holding our breath.

Then there’s the fact that the SEC isn’t just looking to take criminals to task; they’re also supposed to be monitoring activity and setting regulations that make criminal infractions more difficult. The SEC has a full plate at the moment, with the high frequency-trading debate at fever pitch, and major concerns about oversight of financial advisers. Do we want to see people like Corzine in shackles? For sure. But we also want to make sure the SEC is doing their job effectively across the board. Maybe Ms. White is up to the task, but for now, we’re watching with a healthy dose of skepticism.

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

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