SEC Chief Given Waiver on Work for Former Client

An agency ethics office has given the chief of the Securities and Exchange Commission the go-ahead to end her recusal from cases involving a major bank that was among her prior clients at a Wall Street law firm.

Mary Jo White received word in a Feb. 6 letter that waiving a part of her standard conflict-of-interest ethics pledge applying to the international bank Credit Suisse “will directly serve the public interest,” according to SEC ethics counsel Shira Pavis Minton.

Before White took over at the SEC in April 2013, she was a partner at the firm Debevoise & Plimpton, which represented Credit Suisse. The ethics office considered White’s previous work for the Zurich-headquartered bank, which has multiple operations inside the United States, to be “minimal,” according to Minton’s letter. White “billed in total less than one hour (0.5 hours in January 2012 and 0.4 hours in February 2012),” the decision said, adding that “there is no reason you should not be able to function objectively.”

Because the SEC regulates in areas in which Credit Suisse is active -- broker-dealer activities, asset management services and investment banking -- “this has led to a situation in which your leadership, experience and expertise have not been brought to bear on significant matters before the commission,” said Minton’s letter. The Office of Government Ethics, the agency responsible for governmentwide ethics enforcement, posted Minton’s letter on its website.

The nonprofit Project on Government Oversight in a blog post noted that the SEC chief’s husband, John White, a partner with the law firm Cravath, Swaine and Moore, has represented Credit Suisse. “A few months before White’s  nomination, the SEC charged a U.S. subsidiary of Credit Suisse with misleading investors in the sale of mortgage-backed securities,” one of the financial products linked to the 2008 economic meltdown, wrote POGO investigator Michael Smallberg.

After her nomination in January 2013, Mary Jo White announced that her husband would address conflict-of-interest concerns by converting his law partnership from equity to nonequity status, thus capping his salary, The New York Times reported.

An SEC spokesman declined comment beyond the language in the waiver.