SEC nominations could stall amid partisan warfare over Supreme Court vacancy

Will a prolonged fight over who gets to fill the seat of the late Justice Antonin Scalia impact the confirmation of two Securities and Exchange Commission nominees?

Feb 16, 2016 @ 1:59 pm

By Mark Schoeff Jr.

Partisan warfare over filling the Supreme Court vacancy created by the sudden death of Justice Antonin Scalia last Saturday could impact other nominees, including two White House appointments to the Securities and Exchange Commission.

Within hours of Mr. Scalia's death, Senate Republicans indicated they would not advance a nomination on a replacement. They said a confirmation vote should be delayed until after the election in November.

“The American people should have a voice in the selection of their next Supreme Court justice,” Senate Majority Leader Mitch McConnell, R-Ky., said in a statement Saturday. “Therefore, this vacancy should not be filled until we have a new president.”

Democrats accused Republicans of shirking their responsibility to keep the nine-member Supreme Court at full strength. They cited examples of the Senate voting on Supreme Court nominations in an election year, such as in 1988 when Justice Anthony Kennedy was approved.

Now the controversy over the nation's highest court could inflict collateral damage on other nominations, such as those to fill two vacancies on the five-member SEC. Last year the White House put forth Republican Hester Peirce and Democrat Lisa Fairfax for slots that opened up with the departures of Republican Daniel Gallagher and Democrat Luis Aguilar.

“Senate Democrats will attempt to make political hay out of any nomination that is moved by the Republican majority until hearings are scheduled on the president's Supreme Court appointment,” Jason Rosenstock, a partner at the government-relations consultant Thorn Run Partners, wrote in an email.

“Ironically, this only further serves to slow down the impetus to moving anyone, including SEC or federal nominees, through the process, and thus creating a wicked negative feedback loop,” he said.

A spokesman for Sen. McConnell pointed to language in the majority leader's statement that specifies he wants to stop only the Supreme Court nomination, not other appointments. But picking and choosing which nominees get consideration could prove to be fodder for retaliatory blockages in a partisan Congress.

A spokesman for Senate Minority Leader Harry Reid, D-Nev., was not immediately available for comment.

Others believe the SEC nominees should be able to stay out of the fray over the Supreme Court seat.

“In this case, you have two qualified nominees — one is a Republican, one is a Democrat,” said Duane Thompson, senior policy analyst at Fi360, a fiduciary-duty consulting firm. “You have parity there. You're not going to upset the balance at the SEC.”

It's not clear when the nomination process for Ms. Peirce and Ms. Fairfax will begin. Senate Banking Committee Chairman Richard Shelby, R-Ala., told Politico in January he didn't anticipate moving nominees until after his March 1 primary. A committee spokesperson was not immediately available for comment.

In the meantime, the SEC will operate with three members: Chairwoman Mary Jo White, an independent appointed by Mr. Obama, Democrat Kara Stein and Republican Michael Piwowar.

Although the SEC staff will continue to work on a uniform fiduciary rule for retail investment advice and on a regulation allowing third-party exams of investment advisers, Mr. Thompson doesn't anticipate that a three-member SEC will take controversial votes.

“You would think Chair White would wait for [Ms. Peirce and Ms. Fairfax] to get on board and participate in the process,” Mr. Thompson said.

0
Comments

What do you think?

View comments

Recommended for you

Upcoming Event

Mar 13

Conference

WOMEN to WATCH

InvestmentNews is honoring female financial advisers and industry executives who are distinguished leaders at their firms. These women have advanced the business of providing advice through their passion, creativity, inclusive approach and... Learn more

Featured video

Events

Why integration is essential (and how it works)

Integration has been one of the biggest fintech themes in 2017. But why (and how) does this work? Matt Brown of CAIS and Sean Mullen of Advice Period explain.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

One adviser's story of losing his son to the opioid epidemic

John W. Brower, president and CEO of JW Brower & Associates, shares the story behind his son's death from a heroin overdose and how it inspired him to help others break the cycle of addiction.

Tax reform will boost food, chemicals, rail stocks. Technology? Not so much

Conagra and Berkshire Hathaway are two stocks that should benefit most from changes in the tax code.

Brace for steepest rate hikes since 2006 in new year

Citigroup, JPMorgan Chase predict average interest rates across advanced economies will climb to at least 1 percent in 2018.

Why private equity wants a piece of the RIA market

Several factors, including consolidation in the independent advice industry and PE's own growing mountain of cash, are fueling the zeal to invest.

Finra bars former UBS rep for private securities transactions

Regulator says Kenneth Tyrrell engaged in undisclosed trades worth $13 million.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print