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.