In 1997, aides to Manhattan District Attorney Robert M. Morgenthau accused her of trying to thwart a state insider-trading investigation by allowing a defendant charged by the district attorney's office to plead guilty to federal charges. Doing so effectively ended Mr. Morgenthau's case, but Ms. White was unapologetic.
So, when Mary Jo White leaves her job as head of the SEC and makes the move that a lot of top regulators make -- leaving government to make boatloads of money working for the people she used to police, then what rewards will be in store for her at any of the companies she used to police, based on the breaks she gives them while head of the SEC? In other words, how much of a break will she give them in anticipation of eventually taking an unprecedentedly large, multimillion-dollar salary at one or more of these firms, if she plays her cards right?
As a clue that should help answer this question, consider the case of an SEC investigator Gary Aguirre who was pursuing an insider trading case against the future CEO of Morgan Stanley. Aguirre asked for permission to interview that future CEO, John Mack. Permission denied. Note that this denial stemmed from the communication between Morgan Stanley's lawyer, who at the time was Mary Jo White, and the higher ups at the SEC, which included the director of enforcement, Linda Thomsen. Aguirre persisted, and was consequently fired, for complaining about having his investigation squelched. In a nutshell, Aguirre blew the whistle and for that reason was fired, leading to the SEC being forced to pay a $750,000 wrongful termination suit to Aguirre because of this wrongful firing.
What's especially significant is that Aguirre's boss, the guy who killed that case against Morgan Stanley, then went to work for Mary Jo White's firm (Morgan Stanley) nine months after the case died, presumably to collect a very handsome reward for his good service to them while at the SEC. And, sure enough, he was there rewarded with a multi-million dollar position at the company, for the favor he did them while he was at SEC.
Regulators at the SEC know that there's a very lucrative job out there waiting for them if they play their cards right. So how hard are they really going to try to regulate these companies when they know they can later pick up that extraordinarily lucrative job?
In Washington, people just kind of shake their heads at something like this because it's so common. Lawyers regularly move from government back to these high priced legal defense firms that represent the banks. And then they go back to government again. Bottom line: There's a coterie of between a 100 and 200 lawyers who run this entire charade. It's all the same people on both sides, going back and forth between Washington and Wall Street. Yes it's a charade, a pretense of effective regulation. But at what cost to America is this complete lack of real regulation?
Jack Lew, Obama's pick for Treasury secretary
Jack Lew, the incoming secretary of the Treasury, served three years at Citigroup. His record there, according to The Wall Street Journal was not very lustrous for a man who's about to take over the Treasury Department. No surprise then that the W.S. Journal suggests he got his job at Treasury not because he had the experience, but because he was a crony -- and perhaps an agent? -- of Citigroup's Robert Rubin.
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