(Bloomberg) Mary Jo White, who gained prominence prosecuting terrorists as U.S. attorney for Manhattan, will be named by President Barack Obama to be chairman of the Securities and Exchange Commission, according to a White House statement.
White, a partner at law firm Debevoise & Plimpton LLP in New York, would succeed Elisse Walter, who took over as SEC chairman when Mary Schapiro stepped down last month. Obama, who is scheduled to make the announcement today at 2:30 p.m. in the White House, also will re-nominate Richard Cordray as director of the Consumer Financial Protection Bureau.
“In his first term, the president put in place historic consumer protections and the strongest reforms of Wall Street since the Great Depression,” the White House said in the statement. The two nominations will show “we are effectively implementing these reforms so that Wall Street is held accountable and middle class Americans never again are harmed by the abuses of a few.”
The appointment of White will be a departure for the SEC, which has typically been run by lawyers steeped in financial policy-making and the securities industry. Her relative inexperience in those areas, along with her work defending corporate clients including Ken Lewis, the former chief executive officer of Bank of America Corp., could draw criticism from some lawmakers and advocates for investors.
Terrorist Convictions
White, 65, was U.S. attorney for the Southern District of New York from 1993 to 2002, and became a leading terrorism prosecutor, winning the conviction of four followers of Osama bin Laden for the 1998 bombings of two U.S. embassies in Africa.
Under her direction, prosecutors won convictions for the 1993 World Trade Center bombing and a failed plot to blow up the United Nations headquarters and other New York landmarks. During that time, she supervised Robert Khuzami, the SEC’s outgoing enforcement director, and George Canellos, his deputy.
“The Obama administration would be sending a message that the SEC will continue to be a tough cop on Wall Street,” Rick Firestone, a former SEC attorney who is now a partner at law firm McDermott Will & Emery, said in an e-mail. “Her extensive experience in private practice gives her balance and a deep understanding of Wall Street and the issues in our capital markets.”
Policy Inexperience
Still, White, who has served on the board of the Nasdaq Stock Market Inc., could face questions over her lack of policy experience as the SEC grapples with a packed rule-making agenda, including reform of regulations for money-market mutual funds and the Volcker rule ban on banks’ trading with their own funds.
White didn’t immediately respond to an e-mail seeking comment.
Her work as a defense attorney for some of Wall Street’s biggest names could also raise concerns among lawmakers. She represented Lewis during an SEC probe of claims that Charlotte, North Carolina-based Bank of America didn’t disclose bonuses that Merrill Lynch & Co. paid to executives before buying the brokerage. The bank settled the claims for $150 million; Lewis wasn’t accused of wrongdoing.
In 2011, White was hired by News Corp. to defend its independent directors against claims related to the company’s role in phone hacking by News of the World, its former U.K.- based tabloid.
Public Anger
In recent years, the SEC has been faulted by lawmakers, judges and investors for failing to bring more cases related to the financial market turmoil that peaked in 2008. White said last year that prosecutors shouldn’t allow public anger to influence investigations.
“You should be aggressive where there is a crime,” she said at a New York University School of Law event in February 2012. Prosecutors must not “fail to distinguish what is actually criminal and what is just mistaken behavior, what is even reckless risk-taking, and not bow to the frenzy,” she said.
White also surfaced in an SEC controversy when she worked on behalf of Morgan Stanley to vet John Mack before he was named CEO of the investment bank. She sought information in 2005 from then-SEC enforcement director Linda Thomsen about what an insider-trading probe of hedge-fund manager Pequot Capital Management Inc. revealed about Mack’s involvement.
Bloomberg
