During the first hour of last week’s confirmation hearing for Mary Jo White to lead the U.S. Securities and Exchange Commission, senators zeroed in on her decade-long tenure at Debevoise & Plimpton.
Senator Sherrod Brown (D-Ohio) asked White during the March 12 hearing before the Senate Committee on Banking, Housing and Urban Affairs what she had done during her time at the firm that benefited the American public. White, chairwoman of the firm’s litigation department since 2002, started to talk about her experience as the U.S. attorney for the Southern District of New York — but was cut off by Brown, who again asked her to talk about her time at Debevoise.
"I’ve been a lawyer over the last 10 years," White said without pause, "and when you’re a lawyer you represent different types of clients and you are ethically bound to represent them to the best of your ability, and I have done that. This has not changed me as a person. It does not mean that I embraced the policy thoughts of any of my clients in particular.…In this instance if I am confirmed, the American public will be my client, and I will work as zealously as is possible on behalf of them."
The exchange was arguably the biggest confrontation of the day, which also included queries about potential conflicts of interest with White’s banking clients at Debevoise. Most senators seemed pleased with her answers, leading some law firm financial institutions partners to conclude that she likely is facing a smooth road to confirmation.
"There is no question that she should have a very easy confirmation," said White & Case partner Gregory Little, who is based in New York. "I don’t think it was because they were easy on her, but that she is so well qualified."
White earned a reputation as a tough prosecutor while serving as the U.S. attorney for the Southern District of New York from 1993 to 2002. She oversaw the successful prosecution of infamous mob boss John Gotti and the terrorists responsible for the 1993 World Trade Center bombing, namely Ramzi Yousef and Omar Abdel-Rahman, the "Blind Sheikh."
During her time at Debevoise, White helped defend Wall Street clients, the same types of institutions she’ll be targeting if confirmed. She notably defended former Bank of America Corp. chief executive officer Kenneth Lewis and former Goldman Sachs Group Inc. director Rajat Gupta. As a firm, Debevoise represented The Carlyle Group, Goldman Sachs, BB&T, Morgan Stanley, Barclays Capital, Bank of America, Credit Suisse, Deutsche Bank Securities, HSBC and Wells Fargo Securities, among other financial clients.
Thomas Sporkin, a BuckleySandler partner in Washington and former head of the SEC’s office of market intelligence, said that while some may criticize her representation of banks and CEOs, her institutional knowledge allows her to be a more effective regulator. "Some may view her as the fox guarding the henhouse," Sporkin said. "As someone who for the past decade has been so effective defending these institutions, she will clearly know how to prosecute them."
White, who shared the witness table at the Senate hearing with Richard Cordray, Obama’s pick to lead the Consumer Financial Protection Bureau, worked to reassure senators that she would be an aggressive enforcer. "I don’t think there is anything more important than vigorous and credible enforcement of the securities laws," she said during the almost two-hour hearing. "It must be done."
Committee Chairman Tim Johnson (D-S.D.) was the first to question White on potential conflicts regarding the work she did on behalf of financial services clients while at Debevoise.
"Before I agreed to be nominated for this position, I detailed to the White House, the independent office of government ethics and the career SEC ethics official the nature and extent of my and my spouse’s and my firm’s legal practices to be certain that there would be no conflicts that could be problematic or limit my ability to function effectively," White said in response. "I’m very scrupulous about these issues and I place a high bar on them."
Senator Mike Crapo (R-Idaho) asked White about whether the commission would propose a rule governing money-market mutual funds. Former SEC Chairman Mary Schapiro tried and failed to reform the structure of money-market mutual funds. In November, the Financial Stability Oversight Council voted to move forward with proposed recommendations to reform money-market mutual funds in an effort to push SEC officials to propose their own. White said that as chairman, she would make sure the agency proposed a rule.
To date, the SEC has finalized 33 of 95 rules it is required to implement as part of the Dodd-Frank Act. Among the major pieces still lacking: rules for swaps ­oversight under Title VII of the act and a final version of the so-called Volcker Rule, which includes a ban on banks making short-term trades for their own profit.
White said it would be her priority to see that rules related to Dodd-Frank are implemented in a timely and smart fashion. "The SEC needs to get these rules right, but it also needs to get them done," she said.
George Stamboulidis, co-leader of Baker & Hostetler’s white-collar defense and corporate investigations practice in New York, worked with White when she was a prosecutor in the Eastern District of New York. The knowledge she gained from her time in private practice, he submits, will only make her a tougher prosecutor. At the agency, "the SEC and people she serves will be her client and they will have no better advocate."
Jenna Greene contributed to this report. Matthew Huisman can be reached at firstname.lastname@example.org.