Compliance

01:16 PM
Reuters
Reuters
News
Connect Directly
RSS
E-Mail
50%
50%

Obama to Tap Former Federal Prosecutor to Head SEC

President Barack Obama will nominate former federal prosecutor Mary Jo White to head the SEC.

WASHINGTON -- President Barack Obama will nominate former federal prosecutor Mary Jo White to head the Securities and Exchange Commission, the White House said on Thursday, showing a desire to have a tough cop policing Wall Street.

White, the former U.S. attorney for the Southern District of New York who was known for prosecuting terrorists and mob figures, would become the third consecutive woman to hold the powerful post.

She would succeed current SEC Chairman Elisse Walter, who took over in December after predecessor Mary Schapiro stepped down.

The president also plans to renominate Richard Cordray to continue as head of the Consumer Financial Protection Bureau, the U.S. watchdog for consumer products such as mortgages and student loans, said White House spokesman Jay Carney.

The formal personnel announcements are expected at 2:30 p.m. (1930 GMT) on Thursday.

White is a relatively uncontroversial pick, though she does not have a deep securities policy background and she has spent her recent private practice work defending Wall Street figures, including former Bank of America Chief Executive Ken Lewis.

A swift confirmation for White could help the SEC speed up its implementation of the dozens of unfinished rules required by the 2010 Dodd-Frank Wall Street reform law.

The SEC is currently divided between two Democrats and two Republicans after Schapiro, a political independent, departed in December.

Many SEC observers say the lack of a full five-person commission could make it nearly impossible to complete more controversial rules, such as the Volcker Rule, which bans banks from proprietary trading.

HIGH-PROFILE CASES

White, now a respected white-collar defense attorney with the law firm Debevoise and Plimpton, was the only woman in the 200-year history of the U.S. Attorney's Office for the Southern District of New York to serve in the top spot there.

She was in office from 1993 through to 2002, during a tumultuous time starting with the 1993 bombing of the World Trade Center and then later, the infamous Sept. 11, 2001 attacks.

Under her watch, the U.S. Attorney's office won about 35 convictions of militant Muslims charged with plotting against Americans.

"I view her as an incredibly well-regarded lawyer who has spent a significant amount of time as a partner at Debevoise representing companies and individuals in high-profile securities related matters," said Cheryl Scarboro, the former head of the SEC's Foreign Corrupt Practices Act unit and now a partner with Simpson Thacher & Bartlett.

Like Schapiro, White has previously been identified as a political independent.

Unlike Schapiro, White has not worked as a Wall Street regulator. However, White's husband, John White, served as the director of the SEC's Corporation Finance division, which oversees public company disclosures, from 2006 to 2008.

As a defense attorney, White has been involved in some high-profile SEC and Justice Department cases. She represented healthcare provider HCA Holdings in an insider-trading investigation, according to her online biography.

She has also represented JPMorgan Chase & Co in its portion of the $25 billion multi-bank settlement to resolve allegations of mortgage servicing abuses, as well as former Bank of America CEO Lewis over a civil lawsuit in connection with Bank of America's acquisition of Merrill Lynch.

"I have met Mary Jo White, and anyone who knows her at all - extremely capable, competent, bright, tough, and a perfect choice," JPMorgan CEO Jamie Dimon said in an interview on Thursday with Fox Business News from Davos.

It is unclear whether her defense of Wall Street clients could prove troublesome for her during the U.S. Senate confirmation process.

So far, the reaction from liberal-leaning groups has been positive.

"Mary Jo White was a tough, smart, no nonsense, broadly experienced and highly accomplished prosecutor. She knew who the bad guys were, went after them and put them in prison when they broke the law," said Dennis Kelleher, the president of the non-profit organization Better Markets.

As for Cordray, he has already faced some uphill battles with Republicans in Congress.

Cordray, a former Ohio attorney general, was appointed in January 2012 while Congress was in recess after Republicans who were wary of the CFPB's independence blocked his nomination.

The controversial appointment limited the amount of time Cordray could serve without going through a full confirmation process.

The CFPB has drawn criticism from Republicans and business groups, who say it is virtually unchecked and will hurt lending and put small banks out of business.

Asked whether the White House foresees any problems getting Cordray confirmed, Carney said he did not expect any objections to him "on substance."

"He is absolutely the right person for the job," Carney said. He said earlier obstacles to Cordray's nomination had been based on "political considerations" from lawmakers who had opposed the creation of the financial protection board.

Copyright 2010 by Reuters. All rights reserved.

Comment  | 
Print  | 
More Insights
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - July 2014
In addition to regular audits, the SEC will start to scrutinize the cyber-security preparedness of market participants.
Video
Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
Financial services executives are living in a "regulatory pressure cooker." Here's how executives are preparing for the new compliance requirements.