As he settles into a second term, President Barack Obama has taken some heat for failing to appoint more women to high-level positions within his administration. By nominating former Manhattan U.S. Attorney Mary Jo White to head the Securities and Exchange Commission, the president has tapped an aggressive, no-nonsense veteran prosecutor. With White's nomination, Obama is sending a clear message to Wall Street and the banking community that it will continue to be held accountable for the complex financial shenanigans and insider trading that contributed to the economic collapse.
White brings an impressive track record of law enforcement to her new position. During her nine years as U.S. attorney, she oversaw the successful prosecutions of mob boss John Gotti and the plotters behind the 1993 World Trade Center bombing. White also pursued white collar crime during her tenure as the federal government's top prosecutor in Manhattan, securing a $340 million fine against Daiwa Bank for its cover-up of trading losses.
The SEC's shortcomings as an effective regulator came into sharp relief with its failure to pursue Bernie Madoff's $50 billion Ponzi scheme, despite repeated warnings of wrongdoing dating back to 1999. More recently, the SEC, working along with the FBI and federal prosecutors, has pursued successful insider trading cases against high-profile Wall Street figures such as Raj Rajaratnam, who is serving an 11-year prison term and faces $158 million in fines and penalties, and his associate Rajat Gupta, who received a two-year prison term and a $5 million fine.
But White takes over an agency that has been historically understaffed and underfunded. The SEC needs more than a hard-charging bulldog at its helm if it is expected to take on deep-pocketed and well-defended Wall Street firms with the wherewithal to stall investigations. Too often a stretched-thin SEC has been forced to settle potential criminal cases with only a modest fine and no admission of guilt.
Obama's appointment of a battle-tested and respected woman to lead the nation's top financial enforcement agency is welcome. But White cannot fully protect the interests of investors and consumers unless she also has the investigative and prosecutorial weapons at her disposal to do the job on a level playing field with the industry she is charged with regulating.