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“White House Could Grant Mary Jo White a Waiver From Ethics Pledge”

Posted by Larry Doyle on February 19, 2013 6:04 AM |

If Mary Jo White were to be confirmed as the new head of the SEC, might she be the most conflicted individual to be our nation’s chief financial cop since the first person to occupy that seat, that being Joe Kennedy himself?

The White House and Washington would like to position Ms. White’s confirmation as nothing more than a formality. Our democracy deserves better than that.

Why would President Obama nominate an individual to the critically important position as head of the SEC who may have to abstain on voting on rules and cases that would impact a host of former clients, including Goldman Sachs, JP Morgan, Bank of America, and Morgan Stanley?

The Los Angeles Times highlights these conflicts in writing just yesterday:

She would have quite a minefield to navigate,” said Robert Kelner, an attorney who is an expert in government ethics rules at the law firm Covington & Burling in Washington.

Government ethics rules generally prevent commissioners from participating in matters in which they or their spouses have any financial stake, or have any interest that could raise questions about their impartiality, Kelner said.

These rules generally restrict commissioners from taking part in cases they worked on while in the private sector — whether to bring a securities fraud lawsuit against a former client, for example, Kelner said.

How might the White House circumvent the enormous conflicts facing Ms. White?

The White House could grant White a waiver from the ethics pledge.

But of course. Why are we bothering with ethics anyway, right? Those damn ethics seem to get in the way at the most inopportune times. I mean, how the heck can one run a commission — let alone a country — if there is a need to worry about ethics.

Let’s leave Mr. Ethics outside and welcome in Mr. Crony and friends so we can keep this party going.

Do you have any confidence whatsoever that anybody on the Senate committee hearing Ms. White’s confirmation may seriously question her? The litmus test for me in regard to Ms. White’s confirmation hearing will be whether any Senator has the balls to cross-examine her on how she intervened on behalf of Morgan Stanley and John Mack in order to derail the insider trading case being pursued by Sense on Cents Hall of Famer Gary Aguirre.

White’s client won. Aguirre got fired. America and those who care about free market capitalism LOST. Let’s hear more from Ms. White on that case. Will she allow others like herself to intervene with SEC commissioners on behalf of clients like Morgan Stanley and John Mack?

Do not think for a second that global investors are not very much aware of how deeply embedded crony capitalism has become established in our markets and our country. We pay a very steep price for that cronyism each and everyday.

Navigate accordingly.

Larry Doyle

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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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