Today, the Senate Banking Committee considers President Obama's pick to head the Securities and Exchange Commission. Mary Jo White was a former federal prosecutor, but she was also a private defense attorney who, among other cases, represented JPMorgan Chase against charges stemming from the financial crises. Her defense work raises questions about whether she would have to recuse herself from some SEC prosecutions.
The SEC Commission is made up of five members. If Mary Jo White has to recuse herself that would leave four votes.
“So to the extent that there is a 2-2 tie, that could very much hamper the commission’s ability to prosecute cases,” says former SEC Assistant Regional Director Robert Heim.
Most SEC prosecutions are unanimous votes but Heim says, “there can be controversial cases that could be impacted by Whites’ requirement to recuse herself from voting.”
But St. Johns University law professor Michael Perino says there is a much bigger obstacle to prosecuting individuals for their involvement in the 2008 financial crisis:
“The simple fact is that time is fast running out,” Perino says.
On Februrary 27, the Supreme Court ruled in a 9-0 decision that financial crimes cannot be prosecuted more than five-years after they are committed.
“For anything that happened in 2008 we’re almost out of time no matter how much Mary Jo White wants to pursue these cases,” says Heim.
White will no doubt have to answer questions about her close ties to the financial industry when her confirmation hearing begins today.