VOL. 37 | NO. 10 | Friday, March 08, 2013
White promises "unrelenting" enforcement at SEC
WASHINGTON (AP) — Mary Jo White vowed Tuesday to make "bold and unrelenting" enforcement of Wall Street a high priority if she is confirmed chairman of the Securities and Exchange Commission.
The former federal prosecutor told a Senate panel that investors need to know the playing field is level and that wrongdoers will be "aggressively and successfully" pursued.
White also pledged to avoid potential conflicts of interest from her work over the past decade as a corporate litigator.
"Strong enforcement is necessary for investor confidence and is essential to the integrity of our financial markets," White, 65, said during a two-hour confirmation hearing before the Senate Banking Committee.
She is expected win confirmation from the panel and the full Senate, becoming the first prosecutor to lead the SEC. She would replace Elisse Walter, who has been interim chairman since Mary Schapiro resigned in December.
Senators also questioned Richard Cordray, who was re-nominated by Obama to head the Consumer Financial Protection Bureau. His confirmation is less certain. Many Republicans opposed the creation of the agency in 2010 and want to limit his power.
Chairman Tim Johnson, D-S.D., said after the hearing that the panel would vote on both nominations "as soon as possible." Still, he noted that Republican objections to the consumer agency could hold up the vote.
White served as the U.S. attorney in Manhattan from 1993 through 2002. By nominating her to the post, President Barack Obama sent a signal that he wants the government to get tougher with Wall Street.
Critics have complained that the SEC has failed to act aggressively to charge top executives at the biggest U.S. banks who may have contributed to the 2008 financial crisis.
White said enforcement would be a priority and that she would pursue "all wrongdoers - individual and institutional, of whatever position or size."
"Proceeding aggressively against wrongdoers is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others who must be made to think twice -and stop in their tracks - rather than risk discovery, pursuit, and punishment by the SEC," White told the panel.
Still, much of White's work over the past decade has been representing corporate interests. At Debvoise & Plimpton, a prominent New York-based law firm, her clients included JPMorgan Chase, Microsoft, General Electric and Toyota.
Pressed by senators during the hearing about those ties, White tried to reassure them that she would avoid potential conflicts of interest caused by her past work and the work of her husband, who is a corporate attorney. She said her work for large banks and corporations doesn't mean that she has embraced their policies.
"The American public will be my client, and I will work as zealously as possible on behalf of them," White said.
Last month, she promised in a letter to the SEC ethics office to step aside from any decision affecting a former client for one year after she represented them. That's in line with federal ethics guidelines for agency officials.
She also pledged to abstain from all decisions brought by Cravath, Swaine & Moore, her husband's firm.
White's responsibilities will also include enforcing complex regulations written in response to the worst crisis since the Depression of the 1930s. The SEC chairman and commissioners must vote to approve enforcement actions against specific companies or individuals as well as new rules that apply generally.
On Tuesday, White said she would quickly get to the business of writing new rules with the other SEC commissioners. White said she has studied pending issues, including strengthened control over money-market mutual funds.
While White's confirmation appears assured, the fate of Cordray is far less certain. The consumer agency, created by the 2010 financial overhaul law in response to the crisis, was fiercely opposed by Wall Street interests and Republicans in Congress.
Obama resorted to a recess appointment last year to circumvent the Republicans and install Cordray as agency director. The appointment expires at year's end.
On Tuesday, Republicans reminded Cordray that they want to see his powers as director of the agency curbed. Cordray said he was open to working with Congress on making the agency more open and accountable but didn't engage on the issue of its powers.
Questions were raised about the legitimacy of Cordray's appointment when a federal appeals court ruled in January that Obama violated the U.S. Constitution by using a recess appointment in the same way to place two people on the National Labor Relations Board.