Obama to pick new SEC chief
Mary Jo White experience in white-collar prosecution
January 24, 2013 8:27 a.m. - Updated: 8:30 a.m.
WASHINGTON (AP) — President Barack Obama will nominate Mary Jo White to lead the Securities and Exchange Commission, tapping an attorney with broad experience in prosecuting white-collar crimes to lead an agency that has a central role in implementing Wall Street reform.
A White House official said the president would announce White’s nomination during a ceremony in the State Dining Room Thursday afternoon.
At the same event, Obama will renominate Richard Cordray to serve as head of the Consumer Financial Protection Bureau, the official said. The president used a recess appointment last year to circumvent Congress and install Cordray as head of the bureau. That appointment expires at the end of this year.
The official spoke on the condition of anonymity in order to discuss the nominations ahead of the president.
White spent nearly a decade as the U.S. attorney in Manhattan, building a reputation as a tough prosecutor with an expertise in pursuing white collar crimes and complex securities and financial fraud cases. White House officials say that experience makes her well positioned to implement Obama’s Wall Street reform legislation.
While serving as U.S. attorney, White also won convictions related to the 1998 bombings of two U.S. embassies in Africa and the 1993 World Trade Center bombing.
If confirmed by the Senate, White would take over the helm at the SEC from Elisse Walter, who is serving out the rest of former SEC chair Mary Schapiro’s term. Schapiro resigned in December.
Cordray has run the consumer bureau since last year, when Obama used a recess appointment to install him in the job. Senate Republicans had opposed Cordray, as well as the concept of the consumer bureau.
Sen. Elizabeth Warren, D-Mass., first conceived of the idea of a consumer protection bureau. Obama considered naming her to lead the bureau, but her nomination would likely have run into deep opposition on Capitol Hill.
White, 65, currently heads the litigation department at law firm Debevoise & Plimpton.
She was the first woman to hold the position of U.S. attorney in Manhattan, one of the most prestigious positions in federal law enforcement. During her tenure from 1993 to 2002, White won convictions of white-collar criminals, drug traffickers and international terrorists. The most notable was Ramzi Yousef, the mastermind of the 1993 World Trade Center bombing.
She also led the prosecution of mob boss John Gotti when she was acting U.S. attorney in Brooklyn in 1992. Gotti died in prison in 2002.
If confirmed by the Senate, White would be the first prosecutor to head the 79-year-old SEC. Most SEC chairmen traditionally have come from Wall Street or the ranks of private securities lawyers. The choice of White is likely intended to bolster the agency’s enforcement profile in the aftermath of the financial crisis.
White’s background differs sharply from Schapiro, who stepped down last month after guiding the agency in the four years after the crisis. Schapiro worked at the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, the securities industry’s self-policing organization. Some consumer advocates have said that Schapiro’s experience as CEO of FINRA made her more likely to seek compromises and less likely to aggressively pursue misconduct.
During Shapiro’s tenure, the SEC reached major settlements with the biggest banks on Wall Street, including Goldman Sachs, JPMorgan Chase and Citibank. But critics said the penalties were small compared with the banks’ revenues. And they complained that no senior executives were held accountable.
White would be expected to give high priority to expanding the enforcement efforts.
At the same time, much of the pressing work facing the agency involves writing new rules. The SEC is seeking stricter rules for money-market mutual funds and must get into shape the so-called Volcker Rule, which would bar banks from making certain trades for their own profit.
As head of the litigators at Debevoise & Plimpton, White has represented a number of financial institutions likely to have crossed swords with the SEC in enforcement cases. Her clients also included former Bank of America CEO Ken Lewis, whom she represented in a 2010 civil lawsuit by then-New York Attorney General Andrew Cuomo accusing Lewis of misleading shareholders in the bank’s merger with Merrill Lynch.
White also represented the largest U.S. hospital chain, HCA, in the insider-trading investigations by the SEC and the Justice Department of former Senate Majority Leader Bill Frist, whose family owned HCA. The investigations were closed in 2007 with no charges filed against Frist.
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