Posted 10 months ago on Jan. 24, 2013, 2:47 p.m. EST by inclusionman
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I think mostly just another insider. I will reserve final judgement until she acts.
President Obama's expected pick of former U.S. prosecutor Mary Jo White to be the nation's top securities watchdog is widely being taken as signaling a crackdown on Wall Street crime.
But there are red flags, in White's past statements and in her work for bankers as a lawyer in private practice, that raise some doubts about just how zealous an investor protector she will be.
Obama is expected to announce his nomination of White to head the Securities and Exchange Commission on Thursday afternoon, the White House confirmed. Wall Street reform advocates generally praised Obama's choice of White, who ran the U.S. Attorney's office for the Southern District of New York for nearly a decade. In what is arguably the country's most important prosecutorial post, White won convictions against the 1993 World Trade Center bombers, Mafia boss John Gotti and other high-profile defendants.
"Ideally somebody who has prosecuted terrorists and Mafia figures will be able to face down the trade associations" of the financial industry, said Bart Naylor, financial policy advocate for the non-profit group Public Citizen.
"Mary Jo White was a tough, smart, no nonsense, broadly experienced and highly accomplished prosecutor," Dennis Kelleher, president and CEO of Better Markets, a nonprofit group, said in a statement. "She knew who the bad guys were, went after them and put them in prison when they broke the law. That’s what must happen if integrity and investor confidence is to be restored in our securities markets."
But White has for the past decade represented banks and bankers as head of litigation at the New York law firm Debevoise & Plimpton. In more than 10 years as one of New York's most sought-after white-collar defense attorneys, White represented a long list of corporate titans, including former Bank of America chief executive Ken Lewis and, in 2005, Morgan Stanley, which hired her to vet John Mack, a prospective CEO.
In February 2012, White expressed doubts at a panel at New York University about whether banks had committed crimes ahead of the financial crisis. She warned against trying to prosecute "mistaken behavior, what is even reckless risk-taking."
Although she has represented many executives accused of financial crimes, White is not an expert on the inner workings of trading systems, a lack of knowledge that may not serve her well as the SEC struggles to keep up with rapid changes in increasingly complex financial markets.
"The problem with the SEC is that they don't seem to have a grip on" high-frequency trading and other major issues affecting modern financial markets, said Joe Saluzzi, co-head of equity trading at independent brokerage Themis Trading and a frequent critic of high-speed trading. "We're concerned about cleaning up the market, and we need the SEC to take the lead here."
Her background puts to question how aggressively White might prosecute financial fraud and enforce new rules under the Dodd-Frank financial reform law -- most of which have not yet been adopted by the SEC. But some people familiar with her past work as a prosecutor suggested White's background shouldn't be held against her.
"Having worked relatively closely with her in the last few years of the Clinton administration and being in a situation where I could observe what she was doing very closely, there is no doubt in my mind she will be very tough," said University of Maryland law professor Michael Greenberger, who had a top post at the Justice Department at the time White was a U.S. attorney.
Benjamin Hallman and Eleazar David Melendez contributed reporting.