By Jack J. Kelly
It was announced that the recently departed head of the Securities and Exchange Commission, Ms. Mary Jo White, would rejoin her old law firm, Debevoise & Plimpton LLP as a partner.
Similarly, there was an announcement that the former Director of the Division of Enforcement, Andrew J. Ceresney, will also rejoin Debevoise.
I fully acknowledge that the following may seem a little hypocritical coming from a person who earns a living recruiting people out of one firm to join a competing company, but shouldn’t someone question the fairness of a former Securities and Exchange Commission chair returning to her old law firm as a highly paid partner representing the same clients she was just charged with regulating?
It was already awkward when she left the law firm to join the SEC in the first place. White had to recuse herself from many matters since she, or her husband, also a high-powered attorney, represented many of the Wall Street banks and executives that tended to get into scandals.
Ms. White initially worked at Debevoise from 1981 to 1990, and 2003 to 2013 spending a fair amount of her billable hours representing big banks, fat cats, and financial institutions earning a very lucrative living, until President Barack Obama appointed her to head the SEC, and a life of poverty and austerity.
White told the Wall Street Journal and other publications that her practice will “…focus on counseling boards of directors in governance issues, compliance and enforcement issues, as well as representing clients facing government investigations, enforcement actions and litigation“.
White previously earned a relatively measly $165,000 at the SEC. She is now triumphantly returning to a highly regarded Wall Street law firm that boasts average profits per partner of about $2.625 million, according to The American Lawyer. According to ethics disclosures, it is believed that White previously earned about $2.4 million at the law firm during her last year there.
Mary Jo White, according to interviews, does not see any problems with the revolving door of law firm-to-regulator-to law firm (with a stop as an Assistant U.S. Attorney in the Southern District of New York).
Ms. White said that such revolving-door criticisms are “overblown to a degree”.
I’m all for capitalism and earning a nice living for yourself and family, however, in light of the financial crisis, and never-ending parade of scandals, shouldn’t we have some controls over the revolving door between public service and the private sector?
But then again, in this current environment it may not matter. With the likely aggressive slashing of regulations, hiring freezes, budgetary cuts, defanged and demoralized agencies, banks will be free to run amuck without worrying about pesky enforcement actions getting in their way. When this happens, Ms. White will not have any clients to represent anyway.