Wall Street's in Good Hands with Mary Jo White
She's part of a corrupted system.
by Stephen Lendman
On January 24, Obama nominated Mary Jo White as SEC head. "You don't want to mess with Mary Jo," he said. Others have different views. More about her below.
Washington is Wall Street occupied territory. Regulatory oversight is absent. Earlier New Deal reforms are gone.
The Securities and Exchange Act of 1934 followed the Securities Act of 1933. Under the Constitution's interstate commerce clause, it required offers and security sales to be registered. State "blue sky laws" previously governed them.
The 1934 law regulated secondary trading of financial securities. It established the SEC under Section 4 to enforce the new act.
Later came the 1939 Trust Indenture Act, the 1940 Investment Company Act, the same year Investment Advisors Act, Sarbanes-Oxley in 2002, the 2006 Credit Rating Agency Reform Act, and Dodd-Frank in 2010.
SEC regulators long ago abandoned their mandate. The agency was established to enforce federal securities laws, the security industry, the nation's financial and options exchanges, and other electronic securities markets and instruments.
In the 1930s, they were unknown. They include derivatives and other forms of speculation. In principle, SEC is charged with uncovering wrongdoing, assuring investors aren't swindled, and keeping the nation's financial markets free from fraud and other abuses.
For decades, it's been weak-kneed. Under George Bush, it was more facilitator than enforcer. It's a paper tiger. It abandoned the public trust. It operates the same way under Obama. It
- turns a blind eye to fraud and abuse;
- protects Wall Street, not investors;
- neutered its enforcement staff's authority;
- adopted voluntary regulation; and
- lets investment banks hold less reserve capital, as well as freely use leverage speculatively.