by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The latest issue of Bloomberg Businessweek recounts the most recent woes of the U.S. Securities and Exchange Commission. SEC chair Mary Jo White‘s “two-year tenure heading the securities regulator has been marked largely by discord and paralysis rather than accomplishments.”
Expectations were high for White, who came to the job with a reputation as a tough prosecutor. As U.S. Attorney for the Southern District of New York, she took on terrorists and mobsters. Later she became a highly sought-after defense attorney, representing banks and other defendants in government probes. In announcing her nomination in January 2013, President Obama warned the financial industry: “You don’t want to mess with Mary Jo.”
That reputation has been dented at the SEC. The pace of rulemaking has been so slow that some staff have labeled White’s office the cheese cellar: It’s where policy goes to age. The nickname has stuck as proposals and reports have piled up in her office, waiting for her careful, often line-by-line consideration. White’s circumspection has slowed the progress of high-profile rules governing executive pay, broker obligations, and swaps, the financial products that helped fuel the financial crisis.
White had never held a position for which she had to develop complex financial policy. That lack of experience, plus difficulty in developing a consensus on nettlesome issues, has contributed to the agency’s troubles, say critics inside and outside the agency. “You take a commission that faces the most challenging regulatory agenda since its creation and you appoint a nonpolicy person as chair,” says Barbara Roper, director of investor protection for the Consumer Federation of America. The SEC under White “has been as unproductive as I thought it would be.” White declined repeated requests to be interviewed for this story.
The agency’s problems, cited by more than a dozen former and current SEC officials who asked not to be identified discussing internal matters, are compounded by ideological divisions on the five-member commission that force White, a political independent, to try to cut deals with the two Democratic and two Republican commissioners who frequently clash on high-stakes decisions.