April 29, 2013

The Strange Case of SEC Chair White’s Confirmation

This Congress remains a riddle wrapped in a conundrum. As noted in this article, Mary Jo White’s recent confirmation – which I blogged as a “slam dunk – turned out to be less than meets the eye.

The term of a SEC Commissioner is a fixed 5 years, with one Commissioner’s term expiring each year. Mary Schapiro left the SEC early – which is not atypical – as her term expires next year. So when President Obama nominated Mary Jo for Mary’s seat, he nominated her to complete the one year left on that term and he nominated her for the full 5 year term that follows. This also is not atypical, with the most recent examples of Harvey Pitt becoming Chair after being confirmed for the remainder of Arthur Levitt’s term and the full 5 year term that followed (and the same happened for John Shad in 1981).

In this case, the Senate Banking Committee only voted on the remaining one year term – not what Obama had envisioned. Apparently, this short-timer status was a deal cut to get votes from both sides of the aisle. No vote was taken on the following five-year term. I’m not aware of any another occasion when the Senate declined to vote on the follow up term. So this Congress continues to break new ground…

For some proxy season fun, try this “Annual Meeting Bingo Card” from Fay Feeney…

Another First! Annie Small Named as SEC’s General Counsel

Last week, Annie Small was named as the SEC’s General Counsel – the first woman to serve in that role. Annie comes from the White House – and she briefly worked as the SEC’s Deputy General Counsel for Litigation and Adjudication and WilmerHale before that. She replaces Geoffrey Aronow, who becomes Senior Counsel to Chair White. Note that Colleen Mahoney was Acting General Counsel for several months when Dick Walker switched to Director of Enforcement and before Harvey Goldschmidt came on board.

Meanwhile, the FASB appointed Russell Golden as its new Chair.

SEC Enters Into 1st Non-Prosecution Agreement for FCPA Violations

On the same day that the SEC announced Co-Directors for Enforcement – the start of a “tougher” enforcement era – the SEC announced that, for the first time, it entered into a non-prosecution agreement (known as a “NPA”) with a company relating to misconduct under the Foreign Corrupt Practices Act. As noted in this press release, the SEC decided not to prosecute Ralph Lauren for FCPA violations due to the company’s cooperation – here’s a blog from David Smyth about the case. I am posting memos in the “Foreign Corrupt Practices Act” Practice Area.

– Broc Romanek