U.S. President Barack Obama will nominate former federal prosecutor Mary Jo White to head the Securities and Exchange Commission (SEC), a White House source said, restoring the agency's power to work on its overhaul of Wall Street.BRENDAN MCDERMID/Reuters
Wall Street, meet Mary Jo. It looks likely she'll be your regulator for the foreseeable future.
Later this afternoon, President Barack Obama is expected to nominate Mary Jo White to head the U.S. Securities and Exchange Commission. If nominations are meant to send a message, then this one is crystal clear: prepare for some regulatory heat.
Ms. White made her reputation as a no-nonsense federal prosecutor in New York and is as tough and fearless as they come. Among her more notable scalps: John Gotti, the infamous mafia boss, and the terrorists behind the attacks on the U.S. embassies in Africa and the 1993 World Trade Center bombing.
During nearly a decade as the U.S. attorney for the Southern District of New York, she also helped lead some memorable prosecutions of white-collar crime, including financial frauds.
Running the SEC would be a different challenge. Its authority extends only to civil, not criminal, cases, and its report card in the wake of the financial crisis is so-so. The agency has struggled to punish high-level executives for misconduct related to the crisis. It has won some significant settlements from major firms in civil fraud cases, but such costs are borne by shareholders and haven't singled out senior leaders.
(Incidentally, for a refresher on the paucity of criminal prosecutions of Wall Street executives, a program aired on Frontline earlier this week, entitled "The Untouchables," is worth 53 minutes of your time.)
The SEC is also at the forefront of implementing the Dodd-Frank Act, the massive financial reform legislation aimed at preventing a future crisis. Any future leader of the SEC will have to contend with numerous imperatives: cracking down on wrongdoing, writing a series of new rules, and fending off pressure from the army of financial lobbyists seeking to water down those rules.
Critics point out that Ms. White's recent experience is on the other side of the table. She is currently a partner at Debevoise & Plimpton, a New York law firm, where her clients have included former Bank of America Corp. CEO Ken Lewis and News Corp. Another grouse: unlike her predecessors, she lacks deep experience in the minutiae of financial markets – something critical at the SEC, which is also playing a leading role in reining in the excesses of automated, high-speed trading.
What Ms. White does bring, however, is prosecutorial chops. In a statement Thursday, the White House said that her nomination will show that "we are effectively implementing [financial] reforms so that Wall Street is held accountable and middle class Americans never again are harmed by the abuses of a few."