This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

New Watchdog Has Limited Wall Street Chops

NEW YORK ( TheStreet) -- The expected appointment of Mary Jo White as Chair of the Securities and Exchange Commission might mean tougher enforcement action against individuals, though her limited experience in he U.S. capital markets may be a cause of concern for some.

White, a former U.S. attorney in the Southern District of New York, has an impressive record of prosecuting terrorism cases and organized crime but does not seem to have handled many cases on Wall Street.

Her most prominent Wall Street case as a private attorney was the defense of Ken Lewis, former chief of Bank of America (BAC - Get Report) against a civil securities fraud lawsuit filed by former New York Attorney General Andrew Cuomo.

"We do not think her nomination will be market moving but it could lead to a more aggressive SEC regarding the investigation and prosecution of cases stemming from securities fraud," KBW analyst Brian Gardner writes in a note.

Gardner notes that White has taken a narrow view of corporate liability in the past, which means the SEC will be more likely to pursue enforcement actions against individuals.

"Given the SEC's failure to detect Bernard Madoff's fraud and its reputation for being weak in pursuing litigation against Wall Street for issues stemming from the financial crisis, we expect that the SEC will try and step up their prosecutions against the investment banking industry, especially specific individuals," says Gardner.

But when it comes to issues such as market structure, high-frequency and the like, investors should expect little action in the near term according to the analyst.

"Ms. White's husband, John White, previously served as the head of the SEC's Capital Market's Division but Ms. White has limited experience with corporate finance and market structure issues as well as issues such as the Volcker rule and money market fund regulation. She previously served as a director on the NASDAQ but her experience is mostly related to enforcement," he said.

Paul Hastings Securities and Capital Markets Partner Michael Zuppone shares similar concerns. "The appointment signals a continued a policy interest in strong enforcement of the securities laws," he said in a statement. "What's unknown is how she will shape the rule-making required to implement the Dodd Frank Act and the recently JOBS Act. With respect to the JOBS Act, a deregulatory initiative aimed at facilitating capital formation, market participants are anxiously waiting to see what direction the SEC will be heading. With her enforcement background, many will be concerned that we'll see rules advanced that do not fully embrace that policy purpose."

-- Written by Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.39 -0.84%
AAPL $124.43 -1.54%
FB $82.22 -1.18%
GOOG $548.00 -0.73%
TSLA $188.77 -0.94%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs