US President Barack Obama has nominated Mary Jo White, a 65-year-old former federal prosecutor who developed a reputation for cracking down on mobsters, terrorists and white-collar criminals, as the new head of the SEC.
‘You don’t want to mess with Mary Jo,’ Obama said yesterday in announcing his choice to replace Mary Schapiro, who resigned in December as head of the world’s most powerful securities regulator after leading efforts to better regulate the banking sector and promote ethics in capital markets in the wake of the 2008 financial collapse.
‘Over a decade as a US Attorney in New York, she helped prosecute white-collar criminals and money launderers,’ Obama said at a press conference in the White House. ‘In the early 1990s, she brought down John Gotti, 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.’
White, who still faces confirmation by Congress, is taking the helm of the SEC at a time of controversy surrounding good governance legislation linked to the Dodd-Frank Act meant to overhaul the financial sector, as well as rising concern over the growth of high-frequency trading (HFT) and the risks to financial markets it may pose. Elisse Walter, an SEC commissioner, has served as acting commission chairman since Schapiro resigned last month.
Besides implementing the sweeping changes of the Dodd-Frank Act and dealing with the fallout of the 2008 financial collapse, Schapiro’s four years in office saw the creation of a new program to reward corporate whistleblowers, mandatory registration of advisers to hedge funds and private funds, and tighter regulation of asset-backed securities.
‘The SEC, long a vital and positive force for the markets, has a lot of hard and important work ahead of it,’ White said in a short speech accepting Obama’s nomination. ‘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 ensure the strength, efficiency and transparency of our capital markets.’
White’s nomination follows a series of changes in senior staff at the SEC. Besides the change at the very top of the commission, enforcement chief Robert Khuzami announced in January that he will resign, along with general counsel Mark Cahn and Meredith Cross, the director of the division of corporation finance.
Also in January, the SEC named Gregg Berman, a risk management specialist, to head a newly created office charged with scrutinizing the impact of HFT on markets.
The SEC has not yet named a replacement for Khuzami’s high-profile position. Cahn has been replaced by Geoffrey Aronow, a four-year veteran of the enforcement division at the Commodity Futures Trading Commission, and Cross was replaced by her deputy director, Lona Nallengara.
