I’ve been saying for years how the SEC needs effective leadership to do the job that we as taxpayers pay them to do. You may remember my groundbreaking interview with former SEC Inspector General H. David Kotz, in which he said that the SEC had management problems that made it difficult for them to regulate effectively.
Of course, when he made that statement, he was referring to then SEC Chairman Mary Schapiro, who stepped down as of December 14th, 2012. Since then, the organization has been left with a leadership vacuum, lacking a Chairman and a permanent Inspector General. Now one of those problems may be solved as President Obama has announced he will tap Mary Jo White, former U.S. Attorney for the Southern District of New York, to fill Schapiro’s shoes.
So will White be any more effective a leader than Schapiro was? White does have experience prosecuting financial crimes. As an attorney in the Southern District of New York, she worked on cases involving the financial industry. When Wall Street ends up in court, it ends up in the Southern District. And in the Southern District, there was a good chance these crimes would have been prosecuted by Mary Jo White.
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On the other hand, the SEC has had a revolving door problem in the past. The revolving door describes situations where SEC executives leave the organization and take up jobs in the financial sector, working at the very companies they used to regulate. So will that be an issue with Mary Jo White? White has indeed been working in private sector for many years, so she will probably not be completely free of the financial industry’s influence. One plus is that she has worked in the government before, so it’s possible she will be more focused on her role as a public servant than on her loyalty to her former employers.
While it is unfortunate that White has ties to the financial industry, it is also significant just to have someone in the role of Chairman at the SEC. This organization has gone over a month without leadership, and has gone for years without effective leadership. At this point, all we can do is remain hopeful that the SEC’s new Chairman will execute her duties faithfully, and will make a real effort to stem the tide of corruption coming from Wall Street.