Mary Jo White Is Tough on Mobsters and Terrorists. But Bankers?
January 25, 2013 2:36 PM
Former federal prosecutor Mary Jo White has earned plaudits for the successful prosecution of John Gotti for five murders and sundry other high-profile cases. Now that she's been nominated to run the Securities and Exchange Commission, here's a quick review of her record in the world of finance and securities regulation.
Guilty Pleas
White earned much of her gunslinger reputation prosecuting mobsters and terrorists. Still, there's no way to spend a decade running New York's Southern District without handling finance cases. In 2001, she oversaw a case that ended in a guilty plea by Republic New York , which had been acquired by HSBC two years earlier. The deal brought $606 million in investor restitution.
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Family Ties
Husband John White is co-chairman of Cravath Swain & Moore's Corporate Governance and Board Advisory business. From 2006 to 2008, he was also the head of the SEC's corporate finance division. Obama administration conflict of interest rules preclude his wife from handling any matters that benefit her direct family; past officials such as Robert Khuzami have imposed tighter restrictions on themselves.
(Image: Bloomberg News)
Morgan Stanley
White represented Morgan Stanley (MS) when its boss, John Mack, was facing the prospect of getting drawn into a brewing Pequot Capital insider trading scandal. A subsequent report by the SEC's inspector general faulted senior agency officials for sharing too much information about the agency's investigation with White. The prosecutor herself did not face criticism in report.
(Image: Bloomberg News)
Ken Lewis
After New York state filed a suit alleging that her client, Ken Lewis, withheld evidence of moutning losses at Merrill Lynch when he was Bank of America (BAC) chief executive, White released a statement declaring that "there was not a shred of objective evidence" against him. Instead, Lewis was being "unfairly vilified," White declared. B of A later settled an investor lawsuit alleging that it had hidden Merrill losses for $2.4 billion.
(Image: Bloomberg News)
Avoiding 'Overkill'
Shortly after White left the Southern District of New York office in 2002,, she told the New York Times that "arresting executives is a way the government tries to prove it means what it says…. The danger, of course — and it's a significant one — is overkill, sweeping into the prosecutorial frenzy people who should not be charged ."
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Unusual Support
White's choice to head the SEC has drawn plaudits from some observers who are usually critical of ties between Washington and the financial industry. Neil Barofsky, the former special inspector general of the Troubled Asset Relief Program, has profusely praised White on Twitter. The head of Better Markets, an advocacy group opposed to regulatory cronyism, declared White won't be "soft on corporations or Wall Street or anyone else."
(Image: Michael Chu)
