The Obama administration on Friday said it stands behind the chairwoman of the Securities and Exchange Commission, hours after Senator Elizabeth Warren in a searing letter asked the president to remove Mary Jo White as the nation’s top securities regulator.
Warren, the Massachusetts Democrat, has engaged in an extended battle with White, accusing her of failing to demand more disclosure from public companies and vigorously stand up for ordinary investors.
In the letter to the president, Warren focused in particular on corporate political contributions, and the SEC’s failure to issue a rule that forces companies to disclose them.
“This brazen conduct is merely the most recent and prominent example of [White] undermining your administration’s priorities and ignoring the SEC’s core mission of investor protection,” Warren wrote in the heavily footnoted, 12-page missive.
White House spokesman Eric Schultz told reporters Friday that the president continues to believe that White is the “right leader” for the agency, according to press reports.
It’s hardly the first time a national politician has called for the ouster of an SEC chief. In September 2008, John McCain called for the firing of the SEC chairman at the time, Christopher Cox, blaming poor oversight by the President Bush appointee for fueling the financial crisis.
Cox resigned in January 2009, as Barack Obama took office, as is customary for SEC leaders at the start of a new administration. As a practical matter, Warren’s effort to demote White comes just three months before she may step aside anyway.
Former SEC chairman Arthur Levitt said trying to remove White now would be disruptive.
“I generally agree with Elizabeth Warren, but in this case I feel that [White] has done a very good job,’’ Levitt said. “To force her to step down because she hasn’t undertaken one particular priority I think is not reasonable. It does very little to protect investors.”
Warren was traveling and declined to comment, according to her spokeswoman, Lacey Rose. The SEC also declined to comment.
Several people interviewed by the Globe said it’s likely that Warren was striking strategically, ahead of the presidential election.
Sarah Haan, an associate professor at the University of Idaho College of Law who has studied the need for political spending disclosures, said, “There’s a lot of information that voters will not have on corporate political spending, and they will not have that information in part because of the SEC’s failure to write the disclosure mandate rule.”
Warren, an ardent Wall Street critic and consumer advocate, has been emboldened recent days, by the resignation of Wells Fargo chief executive John Stumpf. At a Senate hearing last month on the bank’s creation of more than a million phony accounts, Warren accused Stumpf of “gutless leadership.”
With a court ruling threatening to weaken the Consumer Financial Protection Bureau that Warren helped build — and Republican presidential nominee Donald Trump vowing to gut the regulator entirely — Warren also has been fighting back.
Boston University finance professor Mark T. Williams said if Warren’s goal is to give the SEC more teeth, she wants to influence who is named next to run the agency. From her perspective, he said, “If I’m able to make one of the most powerful bankers in the country, Stumpf, go, I can make Mary Jo White go.”