A profile of Mary Jo White, the chair of the Securities and Exchange Commission, who is making a name for herself as a tough enforcer. But when it comes to regulating, can White keep Wall Street in check?:
As the country sank into a severe recession, many wondered why the major figures in the financial world, whose firms had received billions of taxpayer dollars at the height of the crisis, weren’t being punished for their misdeeds. Because the S.E.C.—unlike the Treasury or the Federal Reserve—is an enforcement agency, it became the focus of the frustration. It was publicly humiliated when, in 2009, and again in 2011, a federal judge in New York, Jed Rakoff, tartly rejected its proposed settlements in fraud investigations of Bank of America and Citigroup. The Bank of America settlement, Rakoff wrote, “does not comport with the most elementary notions of justice and morality.” Rakoff’s Citigroup opinion concluded with a flourish: “In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the S.E.C., of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this Court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances.” As one person who worked in the S.E.C.’s enforcement division put it when I spoke to him, “Judge Rakoff was wagging a finger at the S.E.C.” He raised his middle finger.