Mary Jo White

Remember about a year and a half ago, when President Obama appointed a former federal prosecutor to head the SEC with the promise that she’d be, pound for pound, the toughest regulator D.C. had ever seen?

Well, she’s been tough, alright: tough to deal with. Her fellow Democrats on the commission hate her, her fellow regulators hate her, Congressional Democrats hate her (and Republican ones aren’t interested in giving her any more money), consumer groups hate her, and the White House isn’t thrilled, either.

And what does she have to show for all of the alienation? Well, a great deal of alienation. Read more »

The SEC chair assures that nothing is fucked, vis-à-vis high frequency trading. Read more »

In case that was unclear. Read more »

Evidence.

Well, technically there’ll be some, but a lot fewer instances than in the past. Don’t do the crime if you can’t do the can’t do the time and admit publicly to [circle all that apply] insider trading/running a fake hedge fund/blowing investor money at T.G.I. Friday’s. Read more »

This much she promises you. Read more »

The Wall Street Journal story today about the next Libor domino to fall – RBS, which will be coughing up $700mm or so to regulators in the next few weeks – is full of quietly hilarious lines, perhaps none more so than the Journal‘s deadpan clarification that “the Justice Department has the power to file criminal charges without the bank’s blessing.” For sheer backwardness, though, I think it’s hard to top this:

As part of UBS’s settlement last month, the Swiss bank’s Japanese unit pleaded guilty to wire fraud, a felony. Justice Department officials were heartened by the lack of a negative reaction in the markets and among regulators around the world to UBS’s guilty plea. Before the settlement deal, some officials had worried it could destabilize the bank. That has emboldened officials to pursue similar actions against banks like RBS, according to a person familiar with the matter.

The way a lot of people – sometimes even people at the Justice Department! – think about criminal law goes something like this:

  • If you do something naughty, we will charge you with a crime.
  • If you are convicted of that crime, bad things will happen to you.
  • You don’t want bad things to happen to you.
  • So you won’t do anything naughty.

This is called “deterrence.” All of the parts of it are important: if you are convicted of a crime and bad things don’t happen to you, then the whole system is mostly pointless. When the Justice Department is “heartened by the lack of a negative reaction” to a criminal conviction – when they’re like “yay, no deterrent effect!” – then … then … gaaah. Read more »