Sen. Elizabeth Warren, D-Mass., lambasted Securities and Exchange Commission Chairwoman Mary Jo White in a Tuesday letter about her “broken promises” of agency action on major consumer protection issues, and urged White to “step up to the job” of protecting investors.
“I am disappointed by the significant gap between the promises you made during and shortly after your confirmation and your performance as SEC chair,” Warren told White in the 13-page letter. “You have been SEC chair for over two years, and to date, your leadership of the Commission has been extremely disappointing.”
Warren then detailed four areas where she said White made promises to the Senate but failed to follow through.
Under White’s leadership, Warren said, the SEC has failed to finalize Dodd-Frank rules requiring disclosure of the ratio of CEO pay to the median worker; curb the use of waivers for companies found to be in violation of securities law; and has settled the vast majority of cases without requiring the companies admit guilt. White has been unable to participate in “numerous cases because of recusals” related to her prior employment at the Wall Street defense firm Debevoise & Plimpton, Warren wrote.
Warren also stated the White has been and will continue to recuse herself from certain cases because of her husband’s “ongoing employment” at Wall Street defense firms. White’s husband, John, is a partner at Cravath, Swaine & Moore.
White has recused herself from more than four dozen enforcement investigations, The New York Times reported in February.
“The impact of recusal on the operations of the SEC can be quite damaging,” Warren wrote.
Warren also stated her disappointment with the new SEC rules under the Jumpstart Our Business Startups (JOBS) Act for small-business capital formation that “pre-empt state consumer protections.”
But White shot back in a Tuesday statement that she is “very proud of the agency’s achievements under my leadership, including our record year in enforcement and the Commission’s efforts in advancing more than 30 congressionally mandated rulemakings and other transformative policy initiatives to protect investors and strengthen our markets.”
Sen. Warren’s “mischaracterization of my statements and the agency’s accomplishments is unfortunate,” White said, “but it will not detract from the work we have done, and will continue to do, on behalf of investors.”
Under White, the agency has changed its “neither admit nor deny” policy to require admissions of guilt in more egregious cases. Warren asked White to provide to her by July 1 answers to six questions, including all the investigations and cases for which she’s recused herself, a list of all settlements since Sept. 2014 with information on whether they included admission of guilt and a timeline for the completion of the CEO pay rule.
Warren accused White of providing her with “misleading information” regarding the SEC’s timeline on that rule during a May 21 meeting. Warren cited a recently issued regulatory timeline by the Office of Management and Budget, which states that the CEO pay rule wouldn’t be finalized until April 2016, which ran counter to White’s statements to her and members of Congress that such a rule would be out by fall.
An SEC official who asked not to be named told ThinkAdvisor Tuesday that White is “committed to complete the rule within the timeframe she described to Sen. Warren, which is by fall.”
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