Securities Law Blog

Confirming our speculation earlier this year, on November 14, 2016, SEC Chair Mary Jo White announced that she intends to leave her position at the end of the Obama Administration after nearly four years as the agency’s head. While it is anticipated to occur in January, she did not give an exact date for her departure. She is the first of Obama’s major appointees to reveal her departure since Donald Trump’s victory last week, although she had previously hinted that she would step down regardless of who won the election. White’s term at the helm of the SEC hadn’t been scheduled to expire until June 2019. Despite leaving before her term is up, she will be one of the SEC’s longest serving chairs.

During White’s tenure as SEC Chair, the agency has brought a record number of enforcement actions, and she was responsible for implementing the SEC’s first-ever policy of requiring admissions of wrongdoing in cases involving egregious fraud. In addition, under her leadership, the SEC was involved in significant rule making, including implementing rules mandated by the Dodd-Frank Wall Street reform law and the JOBS Act, a 2012 law designed to help start-ups.

With White’s departure, the SEC will be left with only two of five commissioners, Democrat Kara M. Stein and Republican Michael S. Piwowar, who often disagree on SEC matters. As a political independent, White has essentially represented a tie-breaking vote among the commissioners. Commissioner Stein’s term ends in June 2017.

With the Senate under Republican control, it is anticipated that Donald Trump will likely have a relatively easy time installing his choices to run the SEC. It is speculated that Commissioner Piwowar will lead the agency as acting chairman after White exits until Trump nominates a permanent successor.

Following White’s announcement of her departure, it is anticipated that other financial regulators will follow suit in the coming weeks. Trump has named Paul Atkins to head the transition to a Trump administration for the SEC and other financial regulatory agencies. Mr. Atkins is a former SEC Commissioner who served for six years during President George W. Bush’s administration and is known for his opposition to added regulations. While Trump’s specific plans with respect to financial regulation remain subject to speculation, he has indicated that he will usher in a period of deregulation, including dismantling the Dodd-Frank Act. In filling these open commission positions, the Trump administration may have wide latitude to change the way Wall Street and the U.S capital markets are regulated.