U.S. Senator Elizabeth Warren (D-Mass.) has asked President Obama to immediately replace Mary Jo White as chair of the Securities and Exchange Commission.
In a letter sent to the president Friday, Oct. 14, Warren, a member of the Senate Committee on Banking, Housing, and Urban Affairs, which oversees the SEC, cited the chair’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.”
An SEC spokesperson said the agency had no comment on the letter. The White House didn’t respond to an email request for comment.
In her letter, Warren criticized White for “ignoring the SEC’s core mission of investor protection” by opposing efforts requiring more corporate disclosure and supporting initiatives that reduce disclosure.
Referring to White, Warren wrote, “She has failed to complete disclosure mandates Congress enacted in the wake of the 2008 financial meltdown while simultaneously devoting the SEC’s limited discretionary resources to a far-reaching anti-disclosure initiative cooked up by big business lobbyists seeking to reduce the amount of information public companies must make available to their investors.”
Warren was referring to White’s “Disclosure Effectiveness Initiative” introduced earlier this year, to reduce what she called “information overload” that made it difficult for an investor “to wade through the volume of information she receives to ferret out the information that is most relevant.”
Warren also criticized White for remaining “conspicuously silent” when the White House issued veto threats against anti-disclosure bills, providing cover to those in Congress who seek to roll back disclosure requirements and compromise the transparency and safety of our markets. Enough is enough.”
“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 wrote. “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.”
Despite Warren’s criticism of White’s approach to disclosure by publicly traded companies, the SEC under White has adopted rules requiring financial advisors to disclose more information on Forms ADV about their use of separately managed accounts, branch office operations and social media and it issued new liquidity rules for mutual funds that limit illiquid investments to 15% of assets.
In statements following each initiative, White referred to the benefits for investors.
“Requiring investment advisors to report this additional information will provide investors and the Commission with a better understanding of the risk profile of each advisor and the industry as a whole,” said White in a statement.
About the liquidity rules, she said, “These new rules represent a sweeping change for the industry by requiring strong transparency provisions and enhanced investor protections.”
White’s term as SEC Chair term expires in 2019.
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