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Mary Jo White: Rainmaker

October 2, 2013

By now most everyone involved in the securities industry is aware of the speech SEC Chairman Mary Jo White delivered last month. Entitled “Deploying the Full Enforcement Arsenal,” Chairman White’s speech may be recorded in the annals of securities enforcement as the day the gloves came off.


Image from Wikipedia Commons.

For those who may not remember, Chairman White explained when the Commission will require admissions in its enforcement actions, noting that the assistance an admission may provide to investors pursuing private cases will be considered as one possible factor. In addition, corporate penalties will always be considered in appropriate circumstances and firms should expect to see more mandatory undertakings. Moreover, prior to considering corporate responsibility enforcement staff will look first at individual conduct, working out to the entity. View the text of the speech here.

Chairman White’s remarks were reinforced by Andrew J. Ceresney, the SEC’s Co-Director of Enforcement (and Chairman White’s former fellow partner at Debevoise & Plimpton LLP and former fellow federal prosecutor). Ceresney, in a speech before the Practising Law Institute, warned that the two cases in which the SEC has thus far required admissions will not be the last. DealBook quotes Ceresney as saying: “We will demand admissions, and if the defendant isn’t prepared to agree, we will litigate at trial.” View the DealBook article here. He further mused that the monetary penalties previously levied by the Commission have not been high enough.

All this saber rattling must be music to the defense bar’s ears. Requiring admissions (for the avowed purpose of helping private litigants), targeting individuals, and promising higher penalties is one way to insure enforcement targets seek safety in the warm embrace of their nearest litigator.

She may have left private practice, but Chairman White is still a rainmaker.

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