Warren Asks Obama To Replace SEC Chair Mary Jo White

Having taken down Wells Fargo CEO John Stumpf, Elizabeth Warren is now turning her sights to the incredibly ineffective head of the SEC, Mary Jo White. White was an appointee of Obama’s but she has always been tight with the financial industry and was seen as a moderate. But the failure of the SEC to prosecute any executives over the financial crisis is simply inexcusable. And with new pressure to force more corporate disclosure about corporate campaign donations and overseas tax payments, White has rallied behind her corporate sponsors, arguing that investors may be subject to “information overload” as a result of any new disclosures. The idea that we need to protect investors from getting too much information is a unique and bizarre argument from someone who is head of the SEC. As Warren rightly pointed out, “I’ve never heard of the idea that investors want less information than they’re getting. Let’s be honest about this. I cannot find and you have not produced a single investor who has complained to the SEC about getting too much information.” And, in a 12 page letter to President Obama, Warren called for White’s ouster as head of the agency:

“Chair White’s comprehensive anti-disclosure agenda runs directly contrary to the SEC’s purpose. It hurts investors, undermines Administration policy, and willfully misinterprets congressional mandates. You have the authority to designate a new SEC Chair, and I believe Chair White’s anti-disclosure efforts give you ample reason to do so…Chair White’s refusal to move forward on a political spending disclosure rule serves the narrow interests of powerful executives who would prefer to hide their expenditures of company money to advance their own personal ideologies. Despite her refusal, however, broad support from shareholders, experts, and the public has not waned. The agency has received more than 1.2 million comments related to the potential political spending rule, the vast majority of which support agency action. Forty-four Senators have expressed strong support for a political spending disclosure rule. And a bipartisan group of three former SEC commissioners including Republican Chairman William Donaldson and Democratic Chairman Arthur Levitt called the SEC’s inaction on a political spending disclosure rule ‘inexplicable,’ and said that the agency’s ‘failure to act offends not only us … but investors and the professionals who serve them.’ They added that the agency’s inaction ‘flies in the face of the primary mission of the Commission, which has since 1934 been the protection of investors’…In the wake of the greatest economic meltdown since the Great Depression, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, in part, to address inadequate investor understanding of company behavior. The Act required the SEC to develop several rules to this end. Chair White, however, appears to view these congressional mandates as mere suggestions that the agency is free to ignore. And she has gone further – publicly denigrating some of these requirements as superfluous and misguided…Under the authority outlined in 17 C.F .R. § 200.10, you may immediately designate another SEC Commissioner as Chair of the agency. I strongly urge you to use that authority today.
I do not make this request lightly. I have tried both publicly and privately to persuade Chair White to direct the agency’s resources toward pressing matters of compelling interest to investors and the public, and toward completing those rules that Congress has required it to implement. But after years of fruitless efforts, it is clear that Chair White is set on her course. The only way to return the SEC to its intended purpose is to change its leadership.”

Please read the entire letter from Warren because it reads like a prosecutorial indictment of White’s ineffective and obstructive leadership. White and the SEC are the classic example of regulatory capture and it is high time that the agency was forced to fulfill its obligations to citizens and investors as opposed to protecting corporate interests.