January 24, 2013 / 1:53 PM / 7 years ago

Obama picks former federal prosecutor as SEC boss

WASHINGTON (Reuters) - The White House on Thursday nominated former federal prosecutor Mary Jo White to head the Securities and Exchange Commission, selecting a hard-nosed enforcer who also has experience defending Wall Street figures.

A petite 65-year-old with an outsized reputation for prosecuting terrorists and mob bosses as the former U.S. attorney for the Southern District of New York, White would become the third consecutive woman to hold the post.

President Barack Obama said White is not someone to be messed with.

“One former SEC chairman said, ‘Mary Jo does not intimidate easily,’ and that’s important, because she has a big job ahead of her,” Obama said during a press conference at the White House.

Obama warned that the administration will keep Wall Street and banks on a tight leash, continuing the message of a strong liberal agenda he laid out during his inaugural address on Monday.

White does bring balance to the position, having spent her recent years in private practice representing some major players in the financial crisis, including former Bank of America Corp Chief Executive Ken Lewis.

The pick drew praise from both Wall Street and reform advocates, who say White would ably steer the powerful agency that plays a key role in overseeing U.S. financial markets.

Obama also renominated 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.

New York’s Charles Schumer, a Democrat who is part of the Senate leadership and sits on the powerful Senate Banking Committee, praised White’s reputation as a tough-as-nails prosecutor and predicted she will “easily be confirmed.”

Several Senate Republicans on Thursday also reacted positively to White’s appointment, saying they hope she will work hard to protect investors from fraudsters.

“Having an SEC chairman with extensive prosecutorial experience can be a good thing,” said Iowa Republican Senator Charles Grassley.

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.

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

Schapiro’s departure left the SEC divided between two Democrats and two Republicans. Observers said the split could make it nearly impossible to complete controversial rules, such as the Volcker Rule, which bans banks from proprietary trading.


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 2002, during a tumultuous time that included the 1993 bombing of the World Trade Center and the infamous September 11 attacks of 2001.

Under her watch, the U.S. Attorney’s office won about 35 convictions of militant Muslims charged with plotting against Americans. She also helped successfully prosecute mob boss John Gotti, Sr.

“As a young girl, Mary Jo was a big fan of the Hardy Boys ... As an adult, she has built a career the Hardy Boys could only dream of,” Obama said on Thursday.

As a defense attorney, White has been involved in high-profile SEC and Justice Department cases.

She conducted an internal investigation into corruption at Siemens AG that resulted in a record settlement for the German engineering conglomerate. She also represented healthcare provider HCA Holdings Inc in an insider-trading investigation, according to her online biography.

In the banking world, White represented JPMorgan Chase & Co in major matters related to the financial crisis, as well as former Bank of America CEO Lewis over a civil lawsuit in connection with Bank of America’s acquisition of Merrill Lynch.

It is unclear whether her defense of Wall Street clients could prove troublesome during the U.S. Senate confirmation process, but it will likely limit some of her work at the SEC, at least initially.

There are government ethics standards that bar employees for at least one year from participating in certain matters if a former employer represents a party or is a party.


Wall Street champions and critics both had positive takes on White.

U.S. President Barack Obama (R) stands next to Mary Jo White, a former United States attorney, after he announces her to be the next chairwoman of the Securities and Exchange Commission, in the State Dining Room of the White House in Washington, January 24, 2013. EUTERS/Larry Downing

“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 Network from Davos.

Neil Barofsky, who was hired as an assistant U.S. attorney by White in 2000, and went on to become the Special Inspector General for the Troubled Asset Relief Program, called Obama’s pick an “inspired choice.”

“I expect that she will be unfazed by the intimidation tactics of the usual suspects in Washington - be they antagonistic members of Congress, captured officials from other parts of government or those who so relentlessly push the agendas of the largest banks,” Barofsky said.

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.

On Thursday, White thanked her husband during the press conference and pledged to complete rigorous Wall Street reforms.

“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,” she said.

Known for a legendary work ethic and a fondness for beer and baseball, White also developed a reputation as a ferocious basketball player when in the U.S. Attorney’s office, even though she stands around 5 feet tall.

She is also an avid runner, having competed in numerous New York Road Runners races ranging from 5Ks to half-marathons.

Former SEC enforcement director William McLucas said it was an “excellent sign” that the White House could get someone of her caliber to take the position.

“There is no one I know that works harder,” McLucas said.


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.

U.S. President Barack Obama (R) stands next to Richard Cordray after Obama announced Cordray's renomination to lead the Consumer Financial Protection Bureau in the State Dining Room of the White House in Washington, January 24, 2013. REUTERS/Larry Downing

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.

“Financial institutions have plenty of lobbyists looking out for their interests,” Obama said. “The American people need Richard to keep standing up for them. There is absolutely no excuse for the Senate to wait any longer to confirm him.”

Some political observers said that any fights to come will not be about Cordray personally, but about the agency.

Senator Mike Crapo, who is expected to be tapped as the ranking Republican of the Senate Banking Committee, said Thursday he will continue to oppose any nominee to head the CFPB “until key structural changes are made.”

Reporting by Aruna Viswanatha, Emily Stephenson, Sarah N. Lynch and Matt Spetalnick, with additional reporting by Douwe Miedema, Jonathan Stempel, Anna Sussman, Karen Freifeld and David Henry; Editing by Karey Wutkowski, Vicki Allen, John Wallace, Tim Dobbyn, Matthew Lewis and Jan Paschal

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