Obama’s SEC Pick Wary of Zealous Wall Street Prosecutions

Obama’s SEC Pick Wary of Zealous Wall Street ProsecutionsAs Manhattan’s top federal prosecutor during the 1990s, Mary Jo White could have sought the corporate equivalent of the death penalty: indicting Prudential Securities Inc. for fraudulently marketing $8 billion in ruinous energy partnerships to small investors.

Instead, Prudential’s attorneys pressed White, who had earned notice as an aggressive litigator in terrorism and organized crime cases, to consider something less punitive. She ultimately accepted, agreeing to a $330 million fine and placing Prudential on probation, allowing it to avoid criminal charges.

“We persuaded them there was an unacceptably high risk that charging Prudential Securities would lead to significant losses for the innocent shareholders,” said Scott Muller, a New York defense attorney who represented Prudential. “What she avoided was inappropriate collateral damage.”

How White handled the Prudential case belies her notoriety as a brass-knuckle prosecutor — a reputation stoked by President Barack Obama last month when he nominated her to be chairman of the U.S. Securities and Exchange Commission.

Source: Bloomberg

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