If confirmed by the Senate, White would replace interim Chairman Elisse Walter and assume responsibility for moving ahead with a number of initiatives that would reshape the regulatory landscape for advisors, including the implementation of a uniform fiduciary standard for advisors and broker-dealers.
White, who has made her career as a federal prosecutor and an attorney in private practice, would join the SEC as a relative outsider to the world of policy making, but said she aims to continue the work of Walter and former-Chair Mary Schapiro in enacting new investor protections.
For advisors, the most closely watched proceeding underway at the commission is the proposal to enact a uniform fiduciary standard, which SEC staff, working under a mandate in the Dodd-Frank financial reform bill, proposed in a study published in January 2011. Schapiro had advocated forcefully for extending the existing fiduciary standard, which holds that advisors make recommendations in the best interest of their clients, to broker-dealers. But amid concerns that the heightened regulatory standard would create an undue compliance burden, the SEC tabled the issue and has since been working to produce a cost-benefit study.
At present, the SEC is in a partisan deadlock over the uniform fiduciary standard, but the confirmation of White would reconstitute the agency with five commissioners, and potentially clear the way for movement on the issue. A leading Wall Street trade group, the Securities Industry and Financial Markets Association, is urging the SEC to move ahead with the rulemaking, and recently said that it expects the agency to produce a concept release or a request for information by the end of the first quarter.
In a statement, Kenneth Bentsen, Jr., SIFMA's executive vice president for public policy and advocacy, praised White's nomination.
"Mary Jo White's knowledge of the securities markets, and prior commitment to public service and investor protection, make her a solid choice to serve as chairman of the SEC," he said. "We look forward to working with her to continue the commission's important progress on responsible implementation of the Dodd-Frank Act and other regulatory initiatives that drive public trust and confidence in our financial markets."
Obama also renominated Richard Cordray to head the Consumer Financial Protection Bureau, an agency created by the Dodd-Frank bill. Senate Republicans, concerned against an overly aggressive regulatory agenda at the agency, had blocked Cordray's original nomination. Obama then issued a recess appointment to install Cordray at the helm of the CFPB in a term that ends later this year.
In White, Obama has tapped a famously tough attorney who oversaw high-profile cases as the head of the U.S. Attorney's office in the Southern District of New York, including the prosecution of mob boss John Gotti, and Ramzi Yousef and other terrorists for their role in the 1993 bombing of the World Trade Center and the attacks against U.S. embassies in Africa in 1998. As a prosecutor in a district that includes Manhattan, White also vigorously pursued cases against bad actors in the financial industry, including, most notably, the investigation of the presidential pardon of fugitive financier Marc Rich.
"Over a decade as a U.S. attorney in New York, she helped prosecute white-collar criminals and money launderers," Obama said at a White House event announcing White's nomination. "In the early 1990s, she brought down John Gotti, the head of the Gambino crime syndicate. And she brought to justice the terrorists responsible for bombing the World Trade Center and the American embassies in Africa. So I'd say that's a pretty good run. You don't want to mess with Mary Jo. As one former SEC chairman said, Mary Jo does not intimidate easily. That's important, because she has a big job ahead of her."
White left the U.S. Attorney's office in January 2002, and later that year rejoined the law firm of Debevoise & Plimpton LLP, where she has worked as a defense attorney representing white-collar criminal defendants and been involved in issues involving consumer finance, among other areas of practice.
"If confirmed by the Senate, I look forward to committing all of my energies to working with my fellow commissioners and the extremely dedicated and talented men and women of the staff of the SEC to fulfill the agency's mission to protect investors and to ensure the strength efficiency and the transparency of our capital markets," White said. "The SEC, long a vital and positive force for the markets, has a lot of hard and important work ahead of it."