SEC fails to implement CEO pay disclosure rules or force admissions of wrongdoing
The influential Democrat Senator Elizabeth Warren, known for her campaign in favor of Dodd-Frank regulations, has lashed out at SEC chairman Mary Jo White in a highly personal letter, accusing her of lax enforcement, a failure to deliver on promises and making misleading statements personally to her about CEO pay disclosure rules.
‘You have been SEC chair for more than two years and, to date, your leadership of the commission has been extremely disappointing,’ Warren writes in a 13-page letter to White that details four major complaints and a series of smaller ones. ‘I am disappointed by the significant gap between the promises you made during and shortly after your confirmation and your performance as SEC chair.’
Warren says in the letter that White has failed to implement Dodd-Frank rules requiring disclosure of the ratio of a company’s median pay to that of its CEO, despite four promises to senators two years ago that this would soon be implemented. She also complains that White has continued the previous SEC practice of letting banks settle fraud cases without admitting wrongdoing, despite an announcement in 2013 that the SEC’s policy had changed. Warren says only 19 of the 520 settlements reached since the commission announced the change have required admissions of wrongdoing, and 11 of these ‘required only a broad admission’.
She further says the SEC chair has continued to use the commission’s power to grant some large companies waivers that allow them to bypass certain reviews and other regulatory processes even after they have broken the law. Warren adds that White failed to address concerns of conflicts of interest related to her husband’s role at the law firm Cravath Swaine & Moore, which frequently represents companies in cases before the SEC.
In a public response, White says she is ‘very proud of the agency’s achievements under my leadership. Senator Warren’s mischaracterization of my statements and the agency’s accomplishments is unfortunate, but it will not detract from the work we have done, and will continue to do, on behalf of investors.’
