Ex-Prosecutor Mary Jo White Nominated To Head SEC
Originally published on Fri January 25, 2013 9:14 am
RENEE MONTAGNE, HOST:
This is MORNING EDITION from NPR News. Good morning. I'm Renee Montagne.
STEVE INSKEEP, HOST:
And I'm Steve Inskeep.
Of all the prosecutors' jobs in America, the one with the highest profile may well be the United States Attorney for the Southern District of New York - that federal prosecutor overseas investigations of everything from the mafia to terrorism to financial crimes. During an especially busy time in the 1990s, that U.S. Attorney became Mary Jo White.
MONTAGNE: Today she's back in the headlines. President Obama named the former prosecutor to lead the Securities and Exchange Commission. The president says he wants to keep, quote, going after what he calls irresponsible behavior in the financial industry.
NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: At just five feet tall, Mary Jo White needed a step-stool to see over the White House lectern in the state dining room yesterday. But the former prosecutor casts a long shadow in the world of law enforcement.
President Obama notes that in nearly a decade as head of the U.S. Attorney's office in New York City, White earned a reputation for prosecuting the terrorists behind the World Trade Center bombing, mobster John Gotti, and numerous white-collar crooks.
PRESIDENT BARACK OBAMA: You don't want to mess with Mary Jo. As one former SEC chairman said, Mary Jo does not intimidate easily. And that's important because she has a big job ahead of her.
HORSLEY: As a girl, White was a fan of the Hardy Boys books. And Obama says her adult career is one the fictional detectives could only dream of. The president is looking to cast his nominee as the heroine of a new adventure: The Secret of the Reckless Bankers. He's hoping White can re-write the story's ending.
OBAMA: There's much more work to be done to complete the task of reforming Wall Street and making sure that American investors are better informed and better protected going forward.
HORSLEY: Unlike the U.S. Attorney's office, the SEC handles only civil cases, not criminal ones. And many of those end in settlements, often with no admission of wrongdoing.
James Cox, who teaches securities law at Duke University, thinks White might try to change that if she's confirmed.
JAMES COX: Since she was such a tough prosecutor, and had an unwaving interest of extracting pretty good sanctions against individuals, it would be part of her DNA to expect that she would want to see more individuals prosecuted. So I think this would be a step in that direction. Whether it's going to be successful remains on the political climate of the SEC and the ability to change an agency culture.
HORSLEY: Cox thinks the SEC is often too focused on what he calls a body count process, racking up a large number of cases, rather than a few marquee enforcement actions that might serve as a bigger deterrent.
If she's confirmed, White would not only be charged with enforcing financial rules of the road, as a regulator she'd also have a big hand in writing them.
Even though it's been two-and-a-half years since Congress passed the financial overhaul, Scott Talbott of the industry trade group the Financial Services Roundtable says a lot of the details still have to be filled in.
SCOTT TALBOTT: When the president signed the financial reform law, that was half-time. The legislators left the field and now it's time for the regulators to take over. And we're about halfway through the third quarter of implementation of a 2,000-page law.
HORSLEY: Financial firms have challenged the so-called Volcker Rule, which is designed to limit banks' ability to trade on their own behalf, as well as separate regulations intended to safeguard money market accounts.
TALBOTT: There is a tendency following a crisis to over-regulate. The pendulum rarely stops at the bottom. And so we want to make sure we don't over-regulate here.
HORSLEY: Industry groups praised White for her knowledge of financial markets, even if they privately worry about the symbolism of putting a former prosecutor atop the SEC.
Since leaving the U.S. Attorney's Office in 2002, White has served as a director of the NASDAQ stock exchange. She's also defended clients accused of financial fraud.
The president also re-nominated Richard Cordray yesterday to head the nation's Consumer Financial Protection Bureau. Obama urged the Senate to confirm both nominees quickly.
OBAMA: These are people with proven track records. They are going to look out for the American people, for American consumers, and make sure that our marketplace works better - more transparently, more efficiently, more effectively.
HORSLEY: Cordray is already serving as head of the consumer watchdog agency. Obama used a legally suspect recess appointment to install him in that post last year, despite Republican opposition. That controversial recess appointment is set to expire at the end of this year.
Scott Horsley, NPR News, the White House. Transcript provided by NPR, Copyright NPR.