Mary Jo White gets Obama nod for SEC chair

Former U.S. attorney to replace current chief Walter

Jan 24, 2013 @ 8:47 am

By Mark Schoeff Jr.

As a U.S. attorney, Mary Jo White has stared down terrorists and organized-crime bosses. But she might be turning her sights toward investment advice standards and other issues affecting advisers if she takes over as head of the Securities and Exchange Commission.

The U.S. attorney for the Southern District of New York from 1993 to 2002, Ms. White, 65, was nominated by President Barack Obama on Thursday to become the next SEC chairman.

If approved by the Senate, she would replace Elisse Walter, whom Mr. Obama designated as SEC chairman after Mary Schapiro stepped down on Dec. 14. The confirmation process would take a minimum of several weeks and perhaps a couple months.

Observers agree that Ms. White would need time to get up to speed on regulatory issues. But the fact that she would be coming to the job as a blank slate could be an advantage for participants in the battle to advance a rule that would establish uniform fiduciary duty for retail investment advice.

“As far as I can tell, it's completely an open book,” said David Tittsworth, executive director of the Investment Adviser Association. “It gives us and everybody else an opportunity to speak with her and promote our views on that issue.”

Rather than worrying that a potential fiduciary-duty rule would be further delayed — the SEC has not moved forward since Dodd-Frank was signed into law in 2010 — Knut Rostad, president of the Institute for the Fiduciary Standard, said Ms. White might be able to reinvigorate the debate.

“By definition, she comes from a different realm. That, prima facie, suggests she has a fresh perspective on fiduciary duty and the [Investment Advisers Act of 1940],” said Mr. Rostad, referring to the law under which advisers must act in the best interests of their clients. Brokers currently meet a less stringent suitability standard when selling investment products.

The Financial Planning Coalition – a group comprised of the Financial Planning Association, the Certified Financial Planner Board of Standards Inc. and the National Association of Personal Financial Advisors – said Ms. White’s background in pursuing corporate crime bodes well for the investor protection part of the SEC’s mandate.

“The years of experience Mary Jo White has in prosecuting white-collar criminals is a testament to her commitment to safeguarding investors and the public,” the FPC said in a statement.

Ms. White currently heads the litigation department of Debevoise & Plimpton LLP, and her ascension to the head of the SEC would mark a first. Traditionally, the agency's chief has spent his or her career as a regulator or politician.

One investment adviser is happy that Mr. Obama broke from the usual pattern in making his SEC selection, especially since Ms. White does not have experience with the Financial Industry Regulatory Authority Inc., the broker self-regulatory organization, in her background. Ms. Schapiro, although a fiduciary-duty backer, was a former Finra chief executive.

“I am encouraged that she is from outside the industry,” said David Mendels, director of planning at Creative Financial Concepts LLC. “On balance, Mary Schapiro did a good job, but I'm always wary of people who come out of Finra or other parts of the broker-dealer industry for fear that they may have drunk too much of the Kool-Aid.”

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

How 401(k) advisers can use 'centers of influence' to grow their business

Leveraging relationships with accounting, benefits, and property and casualty insurance firms can help deliver new business leads for retirement plan advisers.

Latest news & opinion

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

SEC advice rule seeks to tighten reins on brokers

The proposed rule puts new restrictions on brokers, but it is still unclear how strongly the SEC is clamping down.

SEC advice rule hearing updates

Commission says a lot of work ahead, public will have 90 days to comment.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print