The revolving door between industry and the Securities and Exchange Commission (SEC) has irreparably undermined the tenure of SEC Chair Mary Jo White, the Project On Government Oversight (POGO) said today in a letter asking President Obama to replace her.
POGO asked the President to name a new Chair who can “provide real accountability and help restore the public’s trust” in our financial regulatory system.
In some cases, White has had to sit on the sidelines in high-profile SEC cases involving her former Wall Street clients, including enforcement actions against JPMorgan and Bank of America, POGO wrote. At other times, she has been granted an exemption from the ethics pledge signed by President Obama’s appointees. These ethics waivers have allowed her to oversee former clients, such as Credit Suisse, despite the potential conflict of interest.
Meanwhile, the SEC under White’s tenure has, with few exceptions, continued to hire representatives of Wall Street to some of the agency’s top positions. Just last month, the SEC named a senior Goldman Sachs lawyer as the agency’s chief of staff.
“White’s views have often aligned with those of her former Wall Street clients,” POGO wrote, “showing how the revolving door can also lead to regulatory capture.”
For instance, White has defended the SEC’s long-standing practice of issuing enforcement waivers and exemptions to firms charged with wrongdoing. Former clients of hers, such as JPMorgan and UBS, have received these waivers even when they were accused of repeatedly violating the same provisions of the securities laws.
“As long as White continues to serve as SEC Chair, there will always be an appearance that she is going easy on the Wall Street titans she used to represent,” POGO wrote.
Follow the link to read POGO’s letter.
Follow the link to read POGO’s 2013 report on the SEC’s revolving door.