U.S. Sen. Elizabeth Warren railed against Securities and Exchange Commission Chair Mary Jo White’s performance, saying her tenure at Wall Street’s top regulator has been marked by weak enforcement and sluggish rulemaking.
“Your leadership of the commission has been extremely disappointing,” Warren, a Massachusetts Democrat, wrote in a letter dated June 2.
White has come under increasing scrutiny in recent months as the agency struggles to finish rules that were required by Congress more than five years ago. According to Warren, White has continued a pattern of letting banks settle fraud cases without admitting wrongdoing and with little disruption to their businesses.
White has also failed to address conflict-of-interest concerns related to her husband’s work as an attorney for Wall Street firms, Warren wrote. The senator asked White for a list of enforcement cases she was recused from because her husband worked on them as an outside attorney.
John White, a partner at Cravath, Swain & Moore, counsels companies on their disclosure and accounting requirements, according to the firm’s website. Mary Jo White told the Senate Banking Committee in March 2013 that her husband’s legal work wouldn’t interfere much with her own duties as chair.
In response, she said recently that the agency has advanced more than 30 regulations required by Congress and last year levied more than $4 billion in penalties against defendants accused of misconduct.
“Senator Warren’s mischaracterization of my statements and the agency’s accomplishments is unfortunate, but it will not detract from the work we have done, and will continue to do, on behalf of investors,” White said.
White House press secretary Josh Earnest said Tuesday that White, a former U.S. Attorney for Manhattan who later defended corporate clients, has “a very strong track record.” President Barack Obama is confident she shares his priorities for regulating Wall Street, Earnest said.
Warren criticized White for not yet finishing a regulation that would require companies to report how much more chief executives earn than the median worker. The rule is required under the 2010 Dodd-Frank law.
White told senators last year that she expected to complete the rule by the end of 2014. In a recent meeting with Warren, White said she hoped it would be done by the fall of 2015, the letter said.
Warren also faulted White for sidestepping Democrats’ calls to require companies to report their political spending — a project White removed from the SEC’s regulatory agenda in November 2013.
Warren called on White to curb the practice of granting waivers that allow banks to continue business as usual after they settle cases with the SEC or criminal authorities.
The waivers allow banks to continue to manage mutual funds, raise money for hedge funds, and issue their own debt with less oversight.
And the Massachusetts senator said the SEC should seek more admissions of fault as a condition of settling charges against companies. White said in June 2013 that the SEC would make companies admit wrongdoing more often. It has required admissions in 19 cases, according to Warren.
“I am disappointed that you have not been the strong leader that many hoped for — and that you promised to be,” Warren said in the letter. “I hope that you will step up to the job for which you have been confirmed, and that you will guide the SEC once again to meet its core mission of protecting investors and maintaining fair, orderly, and efficient markets.”