President Barack Obama tapped Mary Jo White, a former U.S. attorney turned white-collar defense lawyer, to be the next chairwoman of the Securities and Exchange Commission.
Obama announced the nomination Thursday afternoon at the White House. As part of the event, the White House also renominated Richard Cordray to lead the Consumer Financial Protection Bureau, a role he has held for the last year under a recess appointment.
In its choice of White and Cordray, the White House is sending a signal about the importance of holding Wall Street accountable for wrongdoing. Both are former prosecutors.
Regulatory chiefs are often market experts or academics. But White spent nearly a decade as the U.S. attorney in New York, the first woman named to this post. Among her prominent cases, she oversaw the prosecution of John Gotti, the mafia boss, as well as the people responsible for the 1993 World Trade Center bombing. She is now working the other side, defending Wall Street firms and executives as a partner at Debevoise & Plimpton.
As the attorney general of Ohio, Cordray made a name for himself suing Wall Street companies in the wake of the financial crisis. He undertook a series of prominent lawsuits against big names in the finance world, including Bank of America and American International Group.
The White House expects White, 65, and Cordray, 53, to draw on their prosecutorial backgrounds while carrying out a broad regulatory agenda under the Dodd-Frank Act. Congress enacted the law, which mandates a regulatory overhaul, in response to the 2008 financial crisis.
Jay Carney, the White House press secretary, said White has “an incredibly impressive résumé,” and that her appointment along with the renomination of Cordray sends an important signal.
“The president believes that appointment and the renomination he’s making today demonstrate the commitment he has to carrying out Wall Street reform, making sure we have the rules of the road that are necessary and that are being enforced in a way” so as to avoid a crisis like that of 2008, Carney said.
Another White House official added that White and Cordray will “serve in top enforcement roles” in part so that “Wall Street is held accountable and middle-class Americans never again are harmed by the abuses of a few.”
White will succeed Elisse B. Walter, a longtime SEC official, who took over as chairwoman after Mary L. Schapiro stepped down as the agency’s leader in December. Cordray joined the consumer bureau in 2011 as its enforcement director.
The nominations could face a mixed reception in Congress. The Senate already declined to confirm Cordray, with Republicans vowing to block any candidate for the consumer bureau, a new agency created to rein in the financial industry’s excesses. It is unclear whether the White House and Cordray will face another standoff the second time around.
Carney said there were no substantive objections to Cordray’s confirmation, only political ones.
“He is absolutely the right person for the job,” Carney said.
White is expected to receive broader support on Capitol Hill. Sen. Charles E. Schumer, D-N.Y., declared that White was a “tough-as-nails prosecutor” who “will not shy away from enforcing the laws to ensure that markets operate fairly.”
But she could face questions about her command of arcane financial minutiae. She was a director of the Nasdaq stock market, but has otherwise built her career on the law-and-order side of the securities industry.
People close to the SEC note, however, that her husband, John W. White, is a veteran of the agency. From 2006 through 2008, he was head of the SEC’s division of corporation finance, which oversees public companies’ disclosures and reporting.
Some Democrats also might question her path through the revolving door, in and out of government. While seen as a strong enforcer as a U.S. attorney, she went on in private practice to defend some of Wall Street’s biggest names, including Kenneth D. Lewis, a former head of Bank of America. She also represented JPMorgan Chase and the board of Morgan Stanley. Last year, the NFL hired her to investigate allegations that the New Orleans Saints carried out a bounty system for hurting opponents.
Consumer advocates generally praised her appointment Thursday.
“Mary Jo White was a tough, smart, no-nonsense, broadly experienced and highly accomplished prosecutor,” said Dennis Kelleher, head of Better Markets, the nonprofit advocacy group. “She knew who the bad guys were, went after them and put them in prison when they broke the law.”
The appointment comes after the departure of Schapiro, who announced she would step down from the SEC in late 2012. In a four-year tenure, she overhauled the agency after it was blamed for missing the warning signs of the crisis.
Since her exit, Washington and Wall Street have been abuzz with speculation about the next SEC chief. Obama quickly named Walter, then a Democratic commissioner at the agency, but her appointment was seen as a short-term solution. It is unclear if she will shift back to the commissioner role if White is confirmed.
In the wake of Schapiro’s exit, several other contenders surfaced, including Sallie L. Krawcheck, a longtime Wall Street executive. Richard G. Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority, Wall Street’s internal policing organization, was also briefly mentioned as a long-shot contender.
Peter Baker and Kitty Bennett contributed.