As discussed here and here, on June 2, 2015, Sen. Elizabeth Warren wrote SEC Chair White a 13-page letter expressing her "disappointment" in various aspects of Chair White's performance as head of the agency. Sen. Warren's stated that her grievances fell into four key areas: (1) the SEC 's failure to finalize important Dodd-Frank rules requiring disclosure of the ratio of CEO pay to the median worker; (2) the SEC's failure to curb the use of waivers for companies found to be in violation of securities law; (3) the SEC continuing to settle the vast majority of its cases without requiring that companies admit guilt; and (4) Chair White having to recuse herself in numerous cases because of her prior employment at a Wall Street defense law firm and her husband's ongoing employment at a Wail Street defense law firm.
In a letter dated July 10, 2015, Chair White wrote back in response to Sen. Warren's specific complaints and to reiterate her pride "in the agency's many important accomplishments during my tenure as SEC Chair." On the subject of her recusals from certain cases, Chair White stated that it was discussed both prior to and at her confirmation hearing that for a period of two years (which has now passed), she would like all other former SEC Chairs and Commissioners need to recuse herself from certain matters. Specifically, those matters included ones in which she had a potential financial interest or other potential conflicts arising from her prior legal practice or that of her spouse's law firm.
Chair White stated the number of such recusals has turned out to be consistent with her expectation at the time of her confirmation and that she has "participated in every rulemaking since I became Chair." She further noted that "for the period October 1, 2013 to September 30, 2014 (my first full fiscal year as Chair), I participated in more enforcement matters than any of my fellow Commissioners."
Chair White also addressed Sen. Warren's complaint that the SEC requires admissions by settling defendants in a too-small percentage of the agency's enforcement actions (approximately 4% in FY 2014 according to Sen. Warren). In short, Chair White wrote, the first-of-its-kind admissions policy that she introduced soon after becoming Chair is operating as planned, with the vast majority of cases still being settled on the traditional "no admit, no deny" basis. Chair White noted that after instituting the new policy that requires admissions from defendants in certain egregious cases, the SEC has obtained admissions in 26 matters, including admissions from major financial institutions such as JPMorgan Chase, Bank of America, Credit Suisse, Wells Fargo Advisors, Oppenheimer & Co., HSBC, and Standard & Poor's.
Chair White added that the SEC is obtaining admissions in more cases as its policy matures. She wrote that in FY 2015, the SEC has
already obtained more admissions than in the entire prior time period, and we expect this trend to continue. Going forward, I anticipate that we will, in appropriate cases, continue to press wrongdoers to publicly account for their misconduct through admissions, while still carefully balancing the need to achieve swift and certain results and preserve agency resources.