Unless there is a last minute scandal or a repeat of Rand Paul’s epic filibuster, Mary Jo White looks set to the next chairwoman of the Securities and Exchange Commission. But what would a “Mary Jo White SEC” look like and how would it differ from past iterations?
If we read the tea leaves, we can see some strong spots as well as some looming blind spots.
[Will the Sequester Choke SEC, Regulator Funds?]
Along with her respected tenure as a federal prosecutor, White also worked as a defense attorney for some big names firms, namely JPMorgan Chase. Once she is sworn in at the SEC, White may have to recuse herself from participating in any probes of JPMC for at least one year, for example. Don't expect her to be waving a bloody harpoon from JPMorgan's London Whale, the notorious trader who bet and lost big for the investment bank to the tune of $X billion in 2010.
She may also have to sit out on any probes into UBS another firm she has represented, according to media reports.
But if White does sit out on high-profile cases, the five-member SEC Commission could be losing the deciding vote.
"To the extent that there is a 2-2 tie, that could very much hamper the commission's ability to prosecute cases," former SEC Assistant Regional Director Robert Heim told The Washington Post.
If that were not pressure enough, the clock is ticking and White’s SEC will have to act quickly. In late February, the US Supreme Court ruled in a 9-0 decision that financial crimes cannot be prosecuted more than five-years after they are committed.
"For anything that happened in 2008 we're almost out of time no matter how much Mary Jo White wants to pursue these cases," says Heim.
Despite these drawbacks, White has her strengths. In her appearances before the House and Senate banking committees, lawmakers praised her tenure as US attorney for the Southern District of New York where she put away mobsters and terrorists. In fact, one GOP lawmaker -- Tom Coburn of Oklahoma -- has hinted that he will approve Ms. White to the SEC post. Always a good sign in today’s hyper partisan Washington DC.
In her confirmation hearings, White vowed action from the regulatory body that is often accused to allowing the mortgage meltdown of 2008 to happen without any semblance of oversight or even much notice.
As The NY Times Dealbook reports:
Ms. White promised to tackle enforcement actions and unfinished regulation, but offered scant details on her plans. She did, however, signal a flexible approach to reforming money market funds, an approach that could draw scrutiny from investor advocates and liberal lawmakers.
As for the dozens of unfinished rules under the Dodd-Frank Act, Ms. White called them an "immediate imperative." But the agency to date has come up short, falling behind on dozens of Wall Street reforms, including the so-called Volcker Rule that reins in risky trading at big banks.
In her confirmation appearance before the US Senate Banking Committee, White vowed to protect the American consumer.
She said, "The American public will be my client, and I will work as zealously as is possible on behalf of them."
[Read An Open Letter to Mary Jo White]
Phil Albinus is the former editor of Advanced Trading and he currently edits the FierceFinanceIT newsletter. Follow him on Twitter at @philalbinus.