Sen. Elizabeth Warren’s strong criticism of Securities and Exchange Commission Chairman Mary Jo White’s regulatory and enforcement record has drawn an immediate rebuke from the White House.
Warren’s 13-page letter outlined four areas where Warren, D-Mass., contends that White has “broken promises” to members of Senate by not acting on issues she committed herself to handling during her confirmation process.
The letter, sent on Tuesday, cited the SEC's failure to finalize rules requiring disclosure of the ratio of CEO pay to the median worker; its failure to curb the use of waivers for companies that violate securities law; the agency's continued practice of settling the vast majority of cases without requiring meaningful admissions of guilt; and White's repeated recusals related to her prior employment and her husband's current employment.
Warren said White's leadership of the SEC for the past two years has been "extremely disappointing." Warren said the agency has consistently failed to "consistently and aggressively enforce securities law and protect investors and the public" during her two-year tenure.
Warren also expressed concern with the SEC's failure to address undisclosed corporate campaign contributions, the agency's rulemaking that has created large loopholes in Dodd-Frank disclosure rules, and its rules for small business capital formation that preempted important state consumer protections.
"I voted for your nomination despite my concerns about your lack of experience as a regulator," Warren said. As a result, "I am disappointed by the significant gap between the promises you made during and shortly after your confirmation and your performance as SEC chairperson.”
In response, Josh Earnest, White House press secretary, said on Tuesday afternoon that President Obama appointed White to this very important position because she has a strong track record both as a lawyer in the private sector but also as the U.S. Attorney for the Southern District of New York early in her career; that she earned her reputation as somebody who was tough but fair, and maintained a sophisticated understanding of a complex set of issues related to the financial markets.
“The President also is confident that she shares his values and the priority that he has placed on promptly implementing Wall Street reform,” Earnest said.
Earnest said there are a variety of rules that are related to this, and White “has to make her own independent judgment about how those rules should be implemented and on what time frame.
“The President does continue to believe that the reasons that he chose her, based on her experience and her values, continue to be important today. And the President does continue to believe that she is the right person for the job,” Earnest said.
The issue is important because White has agreed to take up the issue of creating a uniform fiduciary standard for sale of investment products. Opponents of such a standard, including Rep. Ann Wagner, R-Mo., recently questioned White as to whether her decision to do so was based on orders from the White House because President Obama has given the Department of Labor strong support for its proposal to impose a uniform standard on sale of investment products into retirement accounts.
InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at firstname.lastname@example.org.
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