UPDATE: Who Will Be Next Head of the SEC?

Are we about to see a continuation of the Wall Street-Washington revolving door at work for this critically important position? How so?

A leak yesterday puts the name of Mary Jo White into the mix to head the SEC. Who is she? Is she the right person for the job? Not according to Sense on Cents Hall of Famer Gary Aguirre, who pulled no punches yesterday in asserting,

“Obama is not going to clean up financial corruption by pinning a sheriff's badge on Wall Street's protector-in-chief.” 

Little left to interpretation there. Let's navigate and learn more about Ms. White as the San Diego Reader lays out, Wall Street Lawyer to Head SEC?

Mary Jo White epitomizes the method by which Wall Street lawyers control the so-called regulatory agency. The method is called the “revolving door.”

There are two ways the scam works: 1. A big Wall Street law firm will represent a crook who has stolen money from the public in a securities scam. The law firm gets its client off the hook by dangling a $2 million-a-year job in front of the SEC lawyer who is in charge of the case; 2. When the SEC is looking for someone to head its enforcement branch, it will choose a Wall Street lawyer who represents the crooks, rather than someone inside the agency who sincerely wants to chase bandits.

If President Obama names Mary Jo White to head the agency, she would represent both sides of the revolving door phenomenon. She was the U.S. Attorney for the Southern District of New York, which is responsible for policing Wall Street. Then she joined the law firm of Debevoise & Plimpton, which defends securities miscreants, among other things.

If she went back to a government role, she will have come full circle, and Americans would be justified in having even more cynicism about the agency than they have now.

Gary Aguirre has had personal experience with her. After a successful law career in San Diego, he retired, but got restless. He boned up on securities law and joined the SEC. He had excellent reasons to believe that a now-defunct hedge fund had talked with John Mack, formerly associated with the hedge fund, about an upcoming acquisition. The hedge fund made a bundle betting on the acquisition. Aguirre thought that Mack should be interviewed. Mary Jo White covertly contacted top people in the SEC on Mack's behalf. Aguirre was fired. Mack went on to head Morgan Stanley.

The two Congressional committees and the SEC's own investigator vindicated Aguirre, who won the suit against the agency. Now, according to Bloomberg, White might rejoin the government. If she is indeed a candidate, I for one hope this story will be repeated and repeated and repeated in the vetting process.

Anybody smell anything around here?

That stench would seem to be the ongoing “revolving” aroma of the Wall Street-Washington Incest continuing to work its way throughout our nation – - –  and the world – - –  and further confirmation as to how rackets are perpetuated.

Ferdinand Pecora likely just rolled over in his grave . . . once again.

Watch your wallets.

I thank the regular reader who brought this story to my attention.

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.