WASHINGTON – Mary Jo White, President Barack Obama’s pick to be chairman of the Securities and Exchange Commission, will likely face tough questions Tuesday from senators about her decade of legal work representing some of the nation’s largest banks and corporations.
But after the Senate Banking Committee hearing is over, White is ultimately expected to win confirmation from the full Senate and become the first former prosecutor to lead the top federal regulator overseeing Wall Street.
White would replace Elisse Walter, who has been interim SEC chairman since Mary Schapiro resigned in December.
The Senate panel will also question Richard Cordray, who was re-nominated by Obama to head the Consumer Financial Protection Bureau.
White, 65, would step into the job at a critical moment for the SEC.
Critics have complained that the agency has failed to act aggressively to charge top executives at the biggest U.S. banks who may have contributed to the 2008 financial crisis. The appointment of a former prosecutor could signal that Obama wants the government to get tougher with Wall Street.
White’s responsibilities will also include enforcing complex regulations written in response to the worst crisis since the Depression of the 1930s. The SEC chairman and commissioners must vote to approve enforcement actions against specific companies or individuals as well as new rules that apply generally.
White would bring impressive legal credentials to the job. She was the first woman to serve as U.S. attorney in Manhattan, where she built an extensive record of prosecuting white-collar crime from 1993 through 2002. She also won high-profile convictions in the 1993 World Trade Center bombing and the 1998 terrorist attacks on two U.S. embassies in Africa, and put crime boss John Gotti away.
Since then, White has led the litigation department at Debevoise & Plimpton, a prominent New York-based law firm. Her list of clients includes JPMorgan Chase, General Electric, Microsoft and Toyota. That could raise questions about her possible conflict of interest, although previous SEC chairmen have faced similar questions.
White has promised in writing to step aside from any decision affecting a former client for one year after she represented them. That’s in line with federal ethics guidelines for agency officials.
In addition, White has pledged to abstain from all decisions before the SEC brought by the law firm of her husband, John White, is a corporate attorney for Cravath, Swaine & Moore.
John White has also committed not to directly engage with the SEC in its rule-writing, to sell his shares in several investment funds and to change his partnership in Cravath so that he doesn’t share in the firm’s profits but receives fixed compensation.
While White’s confirmation appears assured, the fate of Cordray is far less certain. The consumer agency, created by the 2010 financial overhaul law in response to the crisis, was fiercely opposed by Wall Street interests and Republicans in Congress.
Obama resorted to a recess appointment last year to circumvent the Republicans and install Cordray as agency director. The appointment expires at year’s end.
Questions were raised about the legitimacy of Cordray’s appointment when a federal appeals court ruled in January that Obama violated the U.S. Constitution by using a recess appointment in the same way to place two people on the National Labor Relations Board.