Skip navigation
Mary Jo White Copyright Win McNamee, Getty Images

SEC’s White Says She Will Step Aside When Obama Leaves Office

SEC Chair to end four-year tenure in January

By Benjamin Bain and Matt Robinson

Mary Jo White has stepped to the front of the line of financial regulators moving aside for Donald Trump’s administration.

White, a political independent appointed by President Barack Obama, said Monday that she will step down as Securities and Exchange Commission chair in January. Her nearly four-year tenure has been highlighted by high-profile enforcement cases and plagued by internal battles that stalled controversial policies.

With the Senate under Republican control, Trump is likely to have a relatively easy time installing his choices to run the SEC and other agencies, so the vacancy might be filled quickly. The five-seat commission is already two members short and White has essentially represented a tie-breaking vote between Republican Michael Piwowar and Democrat Kara Stein, who split on major issues. 

It remains to be seen what tack the president-elect will take in overseeing the financial industry beyond his campaign pledge to dismantle the Dodd-Frank Act, which has dominated regulators’ work since it was enacted in 2010. Former Commissioner Paul Atkins, a Republican who left the agency in 2008, is leading the Trump transition team’s work on independent regulators like the SEC.

Improve Morale

After taking the helm in 2013, White moved to improve morale at an agency that had been assailed by lawmakers over its failure to spot Wall Street abuses in the run-up to the financial crisis. Her outreach efforts included handing out coffee and doughnuts to rank-and-file employees, and walking the halls of the agency’s sprawling headquarters to chat with workers.

“I also looked past Dodd-Frank, past the financial crisis, pushed the mission of the agency as hard as I could, which produced truly game-changing rulemaking,” White said in an interview. The efforts “strengthened investor protections and our financial system, laying the groundwork for future regulatory regimes and aggressive enforcement, ” she said.

Major enforcement actions under White’s watch included a September lawsuit accusing hedge fund billionaire Leon Cooperman of insider trading. Policy highlights included pushing through rules designed to make the $18.5 trillion mutual-fund industry more resilient.

The SEC also brought first-of-their-kinds cases such as a settlement with hedge fund Och-Ziff Capital Management Group LLC over allegations it paid bribes to win business and accords with private-equity firms over claims that they didn’t adequately disclose fees to investors.

Waiver Fights

White sparred with Democratic commissioners after siding with Republicans to waive additional punishments for companies settling enforcement cases. She also drew persistent criticism from Senator Elizabeth Warren over what the Massachusetts Democrat saw as the agency’s failure to hold individuals accountable for Wall Street wrongdoing.

Warren also chided White for not pursuing rules that would force corporations to disclose their political contributions. The lawmaker last month took the unusual step of urging Obama to remove White from the chairmanship.

The criticism, White said, “comes with the territory. You take a bullet for the agency.”

‘Tough Persona’

White’s ability to take the punches served the SEC well, said Daniel Gallagher, a former Republican commissioner who left the agency in October 2015. Her biggest accomplishment was pushing through regulations in July 2014 that toughened rules on money-market mutual funds, he said.

“The tough persona that she’s developed and needed as a prosecutor really helped,” said Gallagher, who now serves as president of Patomak Partners LLC.

White’s departure in January would leave Piwowar, the sole sitting Republican, as the likely acting chair until a permanent replacement is confirmed by the Senate. 

While it’s early in the process, a number of names are being floated as possible contenders, according to people close to the transition, finance industry trade groups, congressional aides and SEC staff members. Gallagher and Atkins, who is chief executive officer of Patomak Partners, are both possible contenders as are Proskauer Rose LLP lawyer Ralph Ferrara, a former SEC general counsel; and SkyBridge Capital founder Anthony Scaramucci, who’s on the executive committee of Trump’s transition team. Representative Scott Garrett, a New Jersey Republican who lost his re-election bid last week, is being pushed as a possibility by Tea Party Republicans.

White, 68, hasn’t said what she plans to do next. After serving as the U.S. Attorney for the Southern District of New York under President Bill Clinton, she had a lucrative law career representing banks and other clients. Her husband, former SEC official John White, is a partner at law firm Cravath, Swaine & Moore LLP.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.