Warren urges Obama to fire SEC chief

Mary Jo White appearing before the Senate Banking, Housing and Urban Affairs committee in June © Getty

Barack Obama is being pressed by the Democratic party’s left wing to sack Mary Jo White, chair of the Securities and Exchange Commission and one of his most senior appointees.

In a blistering letter on Friday, Senator Elizabeth Warren called on Mr Obama to use exceptional powers to eject Ms White, accusing her of standing in the way of greater corporate transparency.

Her move lays bare dissatisfaction in the party with the head of the market watchdog and Wall Street reform with barely three months remaining of a presidency that began in the throes of the financial crisis.

“I have tried both publicly and privately to persuade Chair White to direct the agency’s resources toward pressing matters of compelling interest to investors and the public,” wrote the outspoken Wall Street critic. “But after years of fruitless efforts, it is clear that Chair White is set on her course.”

Ms White was confirmed in her role in 2013 and is widely expected to be replaced by an appointee of the next president, as is customary when a new administration takes office.

Ms Warren, a Massachusetts senator who has attacked the SEC chair before, accused her of “undermining [the Obama] administration’s priorities and ignoring the SEC’s core mission of investor protection”.

Elizabeth Warren accuses Mary Jo White of ‘ignoring the SEC’s core mission of investor protection’ © Bloomberg

She said Ms White had an “anti-disclosure” agenda and zeroed in on her alleged failure to develop a rule mandating the disclosure of political spending by companies — a hot issue since a loosening of restrictions on US campaign finance in 2010.

“Chair White’s refusal to move forward on a political spending disclosure rule serves the narrow interests of powerful executives who would prefer to hide their expenditures of company money to advance their own personal ideologies,” she wrote.

At a Senate hearing in June, Ms Warren expressed her frustration with Ms White, who replied: “I am disappointed in your disappointment.”

The senator, — a close ally of Bernie Sanders, the former presidential candidate, is a member of the Democratic leadership in Congress and is likely to take on a more prominent role if Democrats take back control of the chamber in November elections.

The SEC is no stranger to criticism. Its alleged lack of vigilance under the George W Bush administration was blamed for contributing to the financial crisis. Those accusations have given way to complaints that it has been too weak in the Obama era.

Ms Warren told the president he could use a little-known provision of the law to demote Ms White and replace her with one of the SEC’s other commissioners.

When Ms Warren accused Ms White’s SEC of being timid and slow in mid-2015, Ms White hit back by saying the senator had been wrong in her characterisation of her statements and the agency’s accomplishments.

Chair White’s refusal to move forward on a political spending disclosure rule serves the narrow interests of powerful executives who would prefer to hide their expenditures of company money to advance their own personal ideologies

Since Ms White was appointed the SEC says it has proposed or adopted more than 50 significant sets of rules. This week it said that in the 12 months to the end of September it had filed a record 868 enforcement actions exposing misconduct by companies and executives.

The SEC was created in 1934 to protect investors and consumers, one of the reforms of the Great Depression that followed the 1929 stock market crash. After the last crisis it was asked to implement many Dodd-Frank reforms and ensure regulations were enforced.

Even the agency’s most ardent defenders recognise it is not fleet-footed, saying it needs time to grapple with complex issues and adapt to changes in markets in the five years since Dodd-Frank became law.

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