Fordham Law


SEC’s White Says Lawmakers Should Respect Agency’s Independence

Fordham Law School in Bloomberg Businessweek, October 03, 2013

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U.S. Securities and Exchange Commission Chairman Mary Jo White said lawmakers left the agency “no room” for independent judgment when they mandated rules related to mining safety and conflict minerals.

Those legislative directives “seem more directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information that primarily informs investment decisions,” White said in remarks prepared for a speech today at Fordham Law School in New York. “I must question, as a policy matter, using the federal securities laws and the SEC’s powers of mandatory disclosure to accomplish these goals.”

The SEC has faced court challenges of rules mandated by the 2010 Dodd-Frank Act related to minerals originating in the Democratic Republic of the Congo and a requirement that oil and gas companies disclose payments made to foreign governments, which a court voided in July.

“To my mind, the SEC achieves the best results and best fulfills its mission, when it uses its expertise, acts independently, and defends that independence against all comers,” White said. “It is a simple principle. And as long as I am chair, I will be guided by it.”

Judges also should respect the agency’s independence and its ability to reach appropriate settlements with securities law violators, she said. The agency’s settlements came under increased scrutiny after U.S. Judge Jed Rakoff rejected a proposed agreement with Citigroup Inc. in part because the bank didn’t admit to any misconduct.

White, who took over the agency’s helm in April, has since shifted the policy of not requiring admissions of wrongdoing, saying she will require them in certain cases. Still, she said judges should defer to the agency’s expertise.