Mary Jo White has stepped to the front of the line of financialregulators moving aside for Donald Trump's administration.

White, a political independent appointed by President BarackObama, said Monday that she will step down as Securities andExchange Commission chair in January. Her nearly four-year tenurehas been highlighted by high-profile enforcement cases and plaguedby internal battles that stalled controversial policies.

With the Senate under Republican control, Trump is likely tohave a relatively easy time installing his choices to run the SECand other agencies, so the vacancy might be filledquickly. The five-seat commission is already two members shortand White has essentially represented a tie-breaking vote betweenRepublican Michael Piwowar and Democrat Kara Stein, who split onmajor issues.

It remains to be seen what tack the president-elect will take inoverseeing the financial industry beyond his campaign pledge todismantle the Dodd-Frank Act, which has dominated regulators' worksince it was enacted in 2010. Former Commissioner Paul Atkins, aRepublican who left the agency in 2008, is leading the Trumptransition team's work on independent regulators like the SEC.

After taking the helm in 2013, White moved to improve morale atan agency that had been assailed by lawmakers over its failure tospot Wall Street abuses in the run-up to the financial crisis. Heroutreach efforts included handing out coffee and doughnuts torank-and-file employees, and walking the halls of the agency'ssprawling headquarters to chat with workers.

“I also looked past Dodd-Frank, past the financial crisis,pushed the mission of the agency as hard as I could, which producedtruly game-changing rulemaking,” White said in an interview. Theefforts “strengthened investor protections and our financialsystem, laying the groundwork for future regulatory regimes andaggressive enforcement, ” she said.

Major enforcement actions under White's watch included aSeptember lawsuit accusing hedge fund billionaire Leon Cooperman ofinsider trading. Policy highlights included pushing through rulesdesigned to make the $18.5 trillion mutual-fund industry moreresilient.

The SEC also brought first-of-their-kinds cases such as asettlement with hedge fund Och-Ziff Capital Management Group LLCover allegations it paid bribes to win business and accords withprivate-equity firms over claims that they didn't adequatelydisclose fees to investors.

Waiver Fights

White sparred with Democratic commissioners after siding withRepublicans to waive additional punishments for companies settlingenforcement cases. She also drew persistent criticism from Sen.Elizabeth Warren over what the Massachusetts Democrat saw as theagency's failure to hold individuals accountable for Wall Streetwrongdoing.

Warren also chided White for not pursuing rules that would forcecorporations to disclose their political contributions. Thelawmaker last month took the unusual step of urging Obama to removeWhite from the chairmanship.

The criticism, White said, “comes with the territory. You take abullet for the agency.”

White's ability to take the punches served the SEC well, saidDaniel Gallagher, a former Republican commissioner who left theagency in October 2015. Her biggest accomplishment was pushingthrough regulations in July 2014 that toughened rules onmoney-market mutual funds, he said.

“The tough persona that she's developed and needed as aprosecutor really helped,” said Gallagher, who now serves aspresident of Patomak Partners LLC.

White's departure in January would leave Piwowar, the solesitting Republican, as the likely acting chair until a permanentreplacement is confirmed by the Senate.

While it's early in the process, a number of names are beingfloated as possible contenders, according to people close to thetransition, finance industry trade groups, congressional aides andSEC staff members. Gallagher and Atkins, who is CEO of PatomakPartners, are both possible contenders as are Proskauer Roselawyer Ralph Ferrara, a former SEC general counsel; and SkyBridgeCapital founder Anthony Scaramucci, who's on the executivecommittee of Trump's transition team. Rep. Scott Garrett, a NewJersey Republican who lost his re-election bid last week, is beingpushed as a possibility by Tea Party Republicans.

White, 68, hasn't said what she plans to do next. After servingas the U.S. Attorney for the Southern District of New York underPresident Bill Clinton, she had a lucrative law career representingbanks and other clients. Her husband, former SEC official JohnWhite, is a partner at law firm Cravath Swaine & MooreLLP.

Bloomberg News

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