On April 10, Mary Jo White was sworn-in as the 31st Chairman of the U.S. Securities and Exchange Commission (“SEC”). Ms. White is the first former federal prosecutor to hold the position. She has also been a white-collar defense attorney at a major New York law firm.

During her confirmation process, Ms. White pledged to oversee a “bold and unrelenting” enforcement program at the SEC, to focus on high-frequency and automated trading, and to explore the decrease in accounting fraud cases pursued by the SEC in recent years. Evidence of Ms. White carrying through on her promise can already be seen - (i) on May 1 news broke that the SEC had circulated a 500-page draft of new reforms for the money market fund industry, and (ii) on May 7 Ms. White stated that the SEC was reviewing the existing practice of allowing settlements without admission of guilt.

Beyond this, it also appears that the SEC has changed its view point, now seeing itself as one regulator amongst a sea of national authorities. For example, in her first month as Chairman, Ms. White met with regulators from Canada, China, Europe, Japan, Mexico, Singapore, Switzerland, and Australia. Similarly, on May 1, in her first formal speech as Chairman, Ms. White stated that “a defining fact of life at the SEC today is that we are not alone in the global regulatory space.” Indeed, on May 1 the SEC unanimously voted to propose new rules for cross-border security-based swap transactions which would bring the SEC’s rules more in-line with the regulations of other, non-U.S. regulatory authorities.

Additional information on these recent events can be found at: http://www.reuters.com/article/2013/05/07/us-sec-money-funds-idUSBRE94615H20130507; http://www.bloomberg.com/news/2013-05-07/white-says-sec-settlements-without-guilt-admissions-under-review.html; http://www.bloomberg.com/news/2013-04-18/sec-to-move-past-financial-crisis-cases-under-new-chairman-white.html; http://www.investmentnews.com/article/20130503/FREE/130509960#; http://www.sec.gov/news/press/2013/2013-77.htm.

Comment

Ms. White’s promise to lead a “bold and unrelenting” enforcement program portends the continued active prosecution of violations of securities laws. Although an active SEC is cause for businesses to keep up their guard, the agency is not likely to be entirely unforgiving; indeed, recent enforcement actions have shown appreciation for cooperation in the form of smaller fines and the use of non-prosecution agreements.

Similarly, Ms. White’s recognition of and apparent focus on the international nature of the regulatory environment may prove to have both benefits and drawbacks for businesses. On the one hand, changes in U.S. rules to comport with the rules of non-U.S. authorities should facilitate cross-border international businesses and provide more certainty as to applicable regulations. On the other hand, increased international cooperation will likely mean increased scrutiny of foreign operations and prosecutions brought concurrently by international authorities.