Sunday, April 14, 2013

Dear S.E.C. Chief - Clock Is Ticking on Mortgage Cases -

Mary Jo White
Times business columnist Gretchen Morgenson identifies cases like that against Sun Trust as opportunities for demonstrations of independence by newly confirmed S.E.C. chair Mary Jo White.  Skepticism is in order.    It is not easy to bite the hand that so recently well-fed you. After stepping down as U.S. Attorney she and her Cravath partner husband John  enriched themselves representing those she is now charged with overseeing, and where appropriate, prosecuting. Among her clients: JP Morgan Chase, UBS, and Microsoft.   She says she will not involve herself in those companies cases.  John White served from 2006 - 2008 as Director of the S.E.C. Division of Corporate Finance.  He says that he will become a non-equity partner, working for a salary.  She has now retired from Debevoise Plimpton, LLP  which paid her over $2.4 million last year, collecting a $42,500/month lifetime pension - which will be prepaid in a lump sum during her tenure at the S.E.C.  Oh what a tangled web even though she does not practice to deceive. 
President Obama's choice of White reveals a dilemma: the competence which she brings has a tail of self-interest that  inevitably poses the question: can she be independent when the firms that continue to reward her and her husband are the servants and advocates of companies she must regulate and perhaps punish? - GWC

p.s. - One issue absent from Morgenson's list is the S.E.C.'s proposed settlement. Judge Jed Rakoff castigated it as a sweetheart deal with Citigroup which bet against its own customers in a synthetic derivatives deal five years ago before the financial collapse. The New Jersey Law Journal Editorial Board has called on White to relent and agree to answer Rakoff's challenging questions. So far the S.E.C. insists that a judge should just rubberstamp its negotiated settlements. - gwc

Dear S.E.C. Chief - Clock Is Ticking on Mortgage Cases -

by Gretchen Morgenson

AFTER receiving unanimous support from the United States Senate, Mary Jo White was confirmed last week as the new head of the Securities and Exchange Commission. At her swearing-in, she  praised S.E.C. officials for “vigorously enforcing the securities laws.”Doubts remain, however, about how potent the S.E.C.’s enforcement has been, especially in the aftermath of the mortgage mania. So Ms. White has some work to do.

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