SEC Chair White To Leave With Obama

Current Republican Commissioner Piwowar seen as interim SEC chair.

Reviewed by: Sarah Lynch
Edited by: Sarah Lynch

WASHINGTON (Reuters) – U.S. Securities and Exchange Commission Chair Mary Jo White plans to step down around the same time President Barack Obama exits the Oval Office, the agency said on Monday.

White, a former federal prosecutor and Wall Street defense lawyer, said in a farewell interview with Reuters that she does not know what she will do next, though retirement is not an option.

Her departure will cap a nearly four-year tenure marked by regulatory and enforcement milestones and internal discord over Wall Street rules.

With White's departure, the SEC will be left with two commissioners, who often staunchly disagree with each other—Democrat Kara Stein and Republican Michael Piwowar.

Piwowar Seen As Interim Leader

Unless the U.S. Senate confirms Hester Peirce and Lisa Fairfax, the two pending SEC nominees during the lame duck session, the 10th floor that is home to the commissioners at the SEC's Washington headquarters could become a very lonely place come January.

Once White departs, Piwowar, as the sole Republican commissioner, will likely be designated by incoming President Donald Trump to serve as acting chairman until a permanent chairman is selected.

Former SEC Republican Commissioner Paul Atkins is heading Trump's transition team for independent financial regulatory agencies, including the SEC.

Potential Nominees

The names of a number of possible candidates have been floating around Washington, including Atkins; former Republican Commissioner Dan Gallagher; Ralph Ferrara, a securities attorney at Proskauer; and Anthony Scaramucci, founder of SkyBridge Capital.

Peirce, a Republican who was nominated by Obama and previously served as counsel to Atkins at the SEC, is widely expected to be renominated by Trump.

White Drove Record Enforcement Action

Since White assumed her post as SEC chair in April 2013, she has presided over a record number of enforcement actions. They consisted of big cases and smaller matters, often referred to as "broken windows" cases—a reference to former New York City Mayor Rudy Giuliani's strategy of policing minor offenses to deter bigger ones.

Among her most notable accomplishments were the institution of a policy requiring some companies to admit wrongdoing when they settle cases with the SEC, and new rules that upended money market mutual fund pricing and aim to reduce systemic risks by asset managers.


White, an independent, has often found herself caught in the crossfire between more partisan SEC commissioners who have not been able to agree on controversial rules.

As such, she has been unable to get some rules, such as a politically charged one requiring financial brokers to put their clients first, across the finish line.

Sen. Warren A White Critic

White has also drawn the ire of progressives, including Massachusetts Democratic Senator Elizabeth Warren, who have criticized her for not being tougher on Wall Street and for refusing to push public companies to disclose their political spending.

Before she leaves, White said she will work to wrap up rules governing the U.S. derivatives market, among other things.

White's departure announcement comes less than month after Warren took the unusual step of asking President Obama to oust the SEC chair.

The SEC draws strength from being a bipartisan panel with a healthy diversity of opinions, but politics are checked at the door, White told Reuters.

‘Your Mission Is The SEC’s Mission’

"When you cross the threshold into the job as chairman or commissioner, then your mission is the SEC's mission," she said.

Unlike some of White's predecessors, who were tasked with restoring confidence in the SEC after the financial market collapse, White has not faced the same kinds of crisis management challenges.

Rather, she had to contend with completing a mountain of rules mandated by the Dodd-Frank Wall Street reform law and the JOBS Act, a 2012 law designed to help startups.

The changes she made in the enforcement division, including requiring corporate defendants in some cases to admit to their wrongdoing, will likely stand out as one of the most significant milestones of her tenure.

Since then, the SEC has done more than 70 settlements with admissions, and some other regulators have followed suit.

In its municipal bond fraud case against the City of Miami, White said the SEC's insistence on admissions helped send the case to trial, and the jury later handed the SEC a victory.

If she has one regret, she said, it is that the SEC has yet to harmonize disjointed rules governing financial advisors and stockbrokers.