With White, Better the Outsider?

In her new role as chair of the SEC, Mary Jo White must demonstrate that she's more than a prosecutor, but someone who can also bring stability to the market.

By naming Mary Jo White the new chair of the US Securities and Exchange Commission (SEC), President Barack Obama is making a statement that rule-breakers on Wall Street will be held accountable for their crimes. Whereas former chair Mary Schapiro had served roles at both the Commodities Futures Trading Commission (CFTC) and the Financial Industry Regulatory Authority (Finra)—and she could be seen as something of a Wall Street insider—White is a tried-and-tested prosecutor.

It will be interesting to observe White’s learning curve as she considers and adjusts to the technology implications of her decisions. While weeding out and punishing criminals is necessary as a deterrent to unlawful activities, the new rules being passed down have led both buy-side and sell-side firms to scramble for solutions in order to remain compliant or to meet various deadlines.

We will have to wait and see how White adjusts to her new post. And it's not a done deal that she will even get the chance to head the SEC, as the US Senate—not exactly known for swift decisions based on broad consensus—still has to confirm her. But implementing the Dodd–Frank Act—more than prosecuting wrongdoers—will prove to be the most important part of the chairperson's role.

Will Wall Street have more or less leverage in fending off certain requirements of Dodd–Frank with a new principal at the helm? Will White be more than just an SEC prosecutor? Will the SEC continue to hire technologists to help with the implementation process, or will it divert its resources to addressing criminal activities?

If the goal of the SEC is to maintain stability in the markets and protect investors, then White's job will require much more than just fighting fraud.