SEC Chair Mary Jo White to Step Down

SEC Chair Mary Jo White announced that she will leave her position at the end of the Obama Administration. In April 2013, she became the 31st Chair of the SEC. Since that time, she has become one of its longest-serving leaders.

Under her administration, the SEC:

  • “advanced more than 50 significant rulemaking initiatives”;
  • “implemented the SEC’s first-ever policy to require admissions of wrongdoing in cases where heightened accountability and acceptance of responsibility is appropriate,” resulting in “admissions from more than 70 defendants, including 44 entities and 29 individuals”;
  • “brought more than 2,850 enforcement actions.” This number was more than had been brought during “any other three-year period in the [SEC’s] history” and included many “first-of-their-kind” cases in asset management, market structure and public finance;
  • “obtained judgments and orders totaling more than $13.4 billion in monetary sanctions”;
  • “charged over 3,300 companies and over 2,700 individuals, including CEOs, CFOs, and other senior corporate officers”;
  • “devoted significant resources . . . on using cutting-edge data analytics to uncover and investigate misconduct, resulting in numerous enforcement actions involving insider trading, asset management and complex financial instruments”;
  • “awarded more than $100 million to whistleblowers who provided key original information that led to successful enforcement actions;”
  • “made significant enhancements to [the SEC] examination program, including increasing staff by about 20 percent by hiring new examiners where funding permitted, and redeploying staff from other program areas to heighten focus on the fast-growing investment management industry.”

The SEC noted that Chair White also serves as a member of the Financial Stability Oversight Council and on several other domestic and international organizations, including the International Organization of Securities Commissions, the Financial Stability Board, the International Financial Reporting Standards Foundation Monitoring Board, the Financial and Banking Information Infrastructure Committee, and the Federal Housing Finance Oversight Board.

Chair White stated:

My duty has been to ensure that the Commission implemented strong investor and market protections, and to establish an enduring foundation for future progress in the most critical areas – asset management regulation, equity market structure and disclosure effectiveness. Thanks to the hard work and dedication of the SEC’s staff, we have accomplished both.

 

Lofchie Comment: Chair White’s resignation was to be expected. Her departure will allow the incoming President to appoint three new SEC commissioners, two of whom will be Republicans. The new chair will be either standing Commissioner Michael S. Piwowar or one of the two new Republican appointees.

A number of significant proposed rulemakings have yet to be considered by the SEC. Leaving aside the security-based swaps rules, the most important incomplete measures, such as required disclosures of political contributions, have little to do with the historic mission of the SEC. When Chair White failed to act quickly on these politically motivated proposals, she was excoriated by Senator Elizabeth Ann Warren, who attacked her professional competence and ethics. The harshness of those attacks, and the questionable policy basis of the proposed rules, suggests that Chair White will not attempt to force the measures through by aggressive means on a two-to-one party-line vote. It is more likely that President-elect Trump’s appointment will pursue his own views on issues addressed by the current proposals.

Chair White stayed calm and maintained her dignity in the face of unwarranted personal attacks. That she managed to train the SEC’s focus on its most important goals at the same time – protecting investors and attempting to create a regulatory system that would generate economic growth – is doubly admirable.

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