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Senator Elizabeth Warren, D-Mass., asked President Obama to replace commissioner Mary Jo White as chair of the Securities and Exchange Commission, citing White’s refusal to develop a political spending disclosure rule and “repeated actions to undermine the agency’s mission of investor protection and the Administration’s priorities.”
The President may designate a new SEC Chair at any time from among the existing SEC commissioners under the authority in 17 C.F.R. §200.10.
Congressional Democrats and the administration have strongly opposed a Republican rider in recent government funding bills that would prevent the SEC from issuing a rule requiring public companies to disclose political contributions.
But Warren says White has “steadfastly refused to issue such a rule, despite overwhelming investor and public support for it.
“Congressional Democrats will fight to remove the recently passed rider from December’s government funding legislation, and I urge you to threaten to veto any effort to extend this corrupt policy,” Senator Warren wrote. “But these efforts will be meaningless as long as Chair White continues to control the agenda of the SEC.”
Additionally, the letter noted that White has focused the agency’s limited resources on pursuing a voluntary “disclosure effectiveness initiative” with the aim of reducing companies’ existing disclosure obligations, while neglecting to complete congressionally-mandated Dodd-Frank rules that would strengthen investor protections.
“For the last three years, [White’s anti-disclosure] views have undermined the SEC, your Administration’s priorities, Congressional mandates, and the best interests of investors,” Senator Warren added. “Under a new Chair, the agency can re-direct its limited discretionary resources away from actively undermining the interests of investors and back toward its core purposes.”
She continued, “Chair White’s unapologetic anti-disclosure posture has also resulted in an SEC that regularly fails to stand up for its own authority and regulations in this area. Her stance has empowered efforts to weaken federal disclosure requirements.”
The senator detailed how the SEC has refused to publicly oppose legislation advanced by House Republicans “to weaken federal disclosure requirements, despite veto threats by the Obama Administration.
“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,” Warren concluded. “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.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
