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SEC nominee Mary Jo White promises tough enforcement if confirmed

March 12, 2013|By Jim Puzzanghera
  • Mary Joe White and President Obama at a news conference in January during which he announced her nomination to lead the Securities and Exchange Commission.
Mary Joe White and President Obama at a news conference in January during… (Carolyn Kaster / Associated…)

WASHINGTON -- Former federal prosecutor Mary Jo White, President Obama's nominee to head the Securities and Exchange Commission, promised senators on Tuesday that tougher enforcement would be a high priority if she was confirmed.

White, who spent the past decade in private practice, said her work for some leading Wall Street firms and figures would not hinder her ability to lead the SEC despite some concerns about potential conflicts of interest.

"That does not change me as a person," she told the Senate Banking Committee. "If, in this instance, I'm confirmed, the American public will be my client."

Her answers appeared to satisfy Democrats and Republicans. She is expected to be easily confirmed by the Senate.

White told the committee that the agency's policing of markets "must be fair, but it also must be bold and unrelenting."

"Investors and all market participants need to know that the playing field of our markets is level and that all wrongdoers – individual and institutional, of whatever position or size – will be aggressively and successfully called to account by the SEC," White said.

"Strong enforcement is necessary for investor confidence and it is essential to the integrity of our financial markets," she continued. "Proceeding aggressively against wrongdoers is not only the right thing to do, but it also will serve to deter the sharp and unlawful practices of others who must be made to think twice – and stop in their tracks – rather than risk discovery, pursuit, and punishment by the SEC."

White said she would not be hindered by the size of a company in pursuing cases. Sen. Robert Menendez (D-N.J.) asked White about recent comments by Atty. Gen. Eric Holder that some banks were so big that prosecuting them could endanger the economy.

Noting that the SEC can only take civil actions because it lacks the power to pursue criminal charges, White said she would "proceed quite vigorously against anyone."

"At the SEC, there’s no institution too big to charge," she said.

But White said the agency does take into account the impact of fines it pursues on a company, including "grievous impact" on shareholders.

White is the only woman to have served as U.S. attorney for the Southern District of New York, a job that handles Wall Street and other high-profile cases. During her tenure from 1993 to 2002, she prosecuted accused white-collar criminals, insider traders and terrorists, including those involved in the 1993 World Trade Center attack.

White then went into private practice for the prestigious New York law firm Debevoise & Plimpton. Her clients included some leading financial industry firms and figures, including JPMorgan Chase & Co., former Goldman Sachs Group Inc. director Rajat Gupta and former Bank of America Corp. chief Ken Lewis.

White's husband, John White, is a partner at Cravath, Swaine & Moore,  another high-powered New York law firm.

The work done by White and her husband in private practice has raised concerns that government ethics rules could force her recusal from cases involving former clients because of potential conflicts of interest.

White said she detailed the extent of such potential conflicts to White House and other government officials and said she was told they were not out of the ordinary.

She said her previous work would not prevent her from voting on rules and other policies. And on enforcement issues, she said, the scope of the potential conflicts "is quite narrow."

In response to questioning by Senate Banking Committee Chair Tim Johnson (D-S.D.), White promised to be "very vigilant" in managing conflicts of interest.

"I do not believe that the recusals, the extent of them, will prevent me from fully performing my duties," she said.

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