Mary Jo White has earned a B- as SEC chairwoman

Securities and Exchange Commission Chairwoman Mary Jo White has one of the toughest jobs in Washington and faces a tough group of critics inside and outside the capital. Among the toughest is Sen. Elizabeth Warren, D-Mass., who certainly has never run an organization with five divisions and more than 4,000 employees, but who nevertheless told Ms. White in a letter: “You have now been SEC chair for over two years, and to date, your leadership of the commission has been extremely disappointing. You have not been the strong leader that many hoped for — and that you promised to be.” Imagine that. Ms. White has headed a huge, highly visible agency in the wake of a financial crisis for two years and she still hasn't accomplished all that Ms. Warren would like. Ms. Warren clearly is a tough grader and likely would give Ms. White a D.

GETTING UP TO SPEED

That would be unfair. In addition to the SEC's historic financial market regulatory responsibilities that Ms. White had to get up to speed on, Congress, in the Dodd-Frank law, gave her a long “honey do” list of new rules to develop. Ms. White has a great many other constituencies to satisfy than just Ms. Warren. As she approaches what could be her last year as head of the SEC, Ms. White can look back on a significant list of accomplishments — first and foremost, an increase in enforcement. While there is some dispute over how the SEC reports the number of enforcement actions taken, there can be little argument about the increase in disgorgements and penalties, which totaled $4.1 billion in 2014. The enforcement penalties alone increased to $1.37 billion in 2014, from $101 million in 2002. In addition, under Ms. White's leadership, the SEC has forced more firms and individuals to admit guilt in settlement agreements than any previous SEC. Critics such as Ms. Warren complain that it's still not enough, but it's a start, and the greater financial penalties and tougher line on admission of guilt should serve as a deterrent to others tempted to break the rules. Ms. White's SEC mandated technological standards for markets and overhauled money market funds to prevent runs on the funds in tough times. It is developing new rules for money management firms, the first of which would increase disclosure on risks in those firms' portfolios. The SEC under Ms. White also has strengthened broker-dealer custody and taken steps to reform the asset-backed securities markets and the credit rating agencies. The key issue facing the SEC that would directly affect individual investors and their advisers is the fiduciary rule. Dodd-Frank gave the SEC authority to promulgate a new fiduciary standard, but the agency has not acted, leaving the field open for the Labor Department to put forward such a rule for retirement advice.

IDEOLOGICAL SPLIT

Perhaps, given the ideological split between the two Democratic commissioners and the two Republican commissioners, especially on the issue of the fiduciary rule, it's understandable that Ms. White has not pushed strongly forward. But at the very least, the SEC could have worked with the DOL on its rule. The SEC's knowledge of how brokers and investment advisers differ, and the different needs of the clients of each, might have informed the development of the DOL's rule and produced a better one. The other area where Ms. White's SEC has fallen down is the examination of investment advisers. The number of examinations is still far too low, as even the agency agrees. Ms. White has complained that Congress has not provided sufficient resources to increase examinations, but surely an agency with a budget of $1.5 billion could find efficiencies to provide the needed resources. Given all this, while we would not grade Ms. White's efforts as harshly as Ms. Warren, we also would not give her an A. In fact, the best we could give her would be a B-.