President Obama has nominated former New York U.S. Attorney Mary Jo White to head up the Securities and Exchange Commission. Since stepping down from her role as a state prosecutor, White has worked for the Manhattan law firm Debevoise & Plimpton.
"Over a decade as a U.S. Attorney in New York, she helped prosecute white-collar criminals and money launderers," the president said Thursday at an event at The White House. "In the early 1990s, she brought down John Gotti, the 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. You don't want to mess with Mary Jo."
On the flip side, White has also defended some of the biggest names on Wall Street. She was a defense attorney for Ken Lewis, who was charged with improper disclosure of Bank of America's acquisition of Merrill Lynch, and she represented Rajat Gupta, who was charged with and eventually sentenced for insider trading.
Despite having defended the same clients she will now have to regulate, Wall Street critics are applauding the president's pick to head up the government agency in charge of protecting investors from white collar and financial fraud. Chris Whalen, executive vice president Carrington Investment Services, agrees.
"I think she is a great appointment," he says. "I would imagine she is going to be quite effective."
That said, Whalen points out that, during the last four years of the Obama administration, securities fraud was essentially ignored.
"[They] have done nothing about the core problem in the subprime crisis, which wasn't capital -- it was the fact that we had bad securities and one morning investors woke up and they said, 'I don't want to own these bonds anymore' and we had a liquidity crisis," Whalen explains. "It was driven by fraud, lack of disclosure and other issues."
While Whalen thinks White will do her best to fight the good fight, he notes that it will be difficult to get anything done. "Congress is constantly beating on you," he says. "It is a hard job because Republicans are always trying to interfere with anything the agency does, and [they] won't fund it adequately."
If confirmed, White would succeed Mary Schapiro, who exited the position at the end of last year.
Also on Thursday, the president renominated Richard Cordray to continue leading the Consumer Financial Protection Bureau.
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