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Head of SEC Given Waiver to Oversee Past Client

Mary Jo White

Mary Jo White, Chairwoman of the Securities and Exchange Commission

Mary Jo White, the head of the Securities and Exchange Commission (SEC), will be allowed to oversee her former client, Credit Suisse, according to a new ethics waiver the U.S. Office of Government Ethics posted to its website this week (PDF).

Before coming to the SEC, White, a former attorney at Debevoise & Plimpton, represented Wall Street giants such as UBS and JPMorgan. President Obama nominated her to head the SEC in January 2013.

Her waiver underscores the complications that can often arise when a former white-collar defense attorney becomes a top regulator overseeing an industry she used to represent.

According to the waiver, signed by the SEC’s ethics officer on Feb. 6, White had been prohibited from overseeing Credit Suisse since joining the agency because she provided legal services to the bank during her stint at Debevoise. In the two years prior to her SEC nomination, she “billed in total less than one hour (0.5 hours in January 2012 and 0.4 hours in February 2012) for work on Credit Suisse matters,” the waiver says.

White, like other Obama appointees, signed an ethics pledge stating she would wait at least two years before participating in agency business “related to my former employer or former clients.”

But the SEC’s ethics officer informed White “there is no reason that you should not be able to function objectively” when overseeing Credit Suisse. White’s “minimal amount of work” for the bank “does not present a significant concern regarding the appearance of undue influence,” the waiver says.

The waiver goes on to assert that the public’s interest has been harmed by White sitting on the sidelines. “Thus far, as Chair of the Commission, you have been recused from particular matters involving Credit Suisse,” the waiver says. “This has led to a situation in which your leadership, experience, and expertise have not been brought to bear on significant matters before the Commission.”

White is still barred from working on “any particular matter on which you personally provided advice to Credit Suisse,” according to the waiver. Her husband, John W. White—a partner at Cravath, Swaine & Moore and a former SEC official—has also represented Credit Suisse, according to a report by DealBook last year.

A few months before White’s  nomination, the SEC charged a U.S. subsidiary of Credit Suisse with misleading investors in the sale of mortgage-backed securities, a type of product that was “ground zero in the [2008] financial crisis,” according to the agency’s then-chief of enforcement.

White and the SEC declined POGO's request for comment.

Image from the Securities and Exchange Commission.

By: Michael Smallberg
Investigator, POGO

Michael Smallberg, Investigator Michael Smallberg is an investigator for the Project On Government Oversight. Michael's investigations center on oversight of the financial sector.

Topics: Financial Sector

Related Content: Ethics, Conflicts of Interest, Financial Oversight, Securities and Exchange Commission

Authors: Michael Smallberg

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