In a letter described by news outlets as "scathing" and "unusually blunt," Sen. Elizabeth Warren (D-Mass.) on Tuesday slammed the country’s top Wall Street regulator for broken promises and lax regulation of the financial industry.
In a 13-page letter, Warren described the two-year tenure of Securities and Exchange Commission (SEC) chairwoman Mary Jo White as "extremely disappointing."
From failing to require companies to admit wrongdoing when the agency finds they violate the law to failing to implement Dodd-Frank rules on CEO pay disclosure, White has not been the "tough watchdog" the SEC needs, Warren said.
Warren also criticized the ongoing use of "waivers," which allow such companies to skirt SEC review, among financial firms that break the law, as well as White's failure to address undisclosed campaign contributions. And the letter raises the question of whether White's "regular recusals" for conflicts of interest have delayed enforcement activity.
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On these and other matters mentioned in the letter, Warren says White made reassuring promises to lawmakers during her 2013 confirmation hearing. However, Warren states, "you appear to have broken those promises."
"The public relies on the SEC to act as the cop on the beat for an honest marketplace—issuing rules that ensure that investors can make informed decisions and holding rule breakers accountable for their actions," Warren wrote. "When the SEC falls down on the job, the impact is felt throughout the economy and it touches every American family."
She continued: "I am disappointed you have not been the strong leader that many hoped for—and that you promised to be. I hope that you will step up to the job for which you have been confirmed."
Warren, who serves on the Senate Banking Committee, voted for White during the confirmation process in 2013, despite some concerns about her banking industry ties. However, the Boston Globe reports that "[r]elations between Warren and White have been steadily deteriorating — with a boiling point reached last month when Warren and White met to discuss a long-delayed rule on chief executive pay."
That rule, cited in Warren's letter, would require public companies to disclose compensation for CEOs, the median pay for their workers, and the ratio between the two. It was supposed to be completed 21 months ago but has been postponed several times, Warren said.
"I cannot understand how and why this rule has been delayed for so long," Warren wrote, "and I am perplexed as to why you told me personally that the rule would be completed by the fall of 2015 when it appears that you were or should have been aware of additional delays."
White, for her part, issued a statement that read in part: "Senator Warren’s mischaracterization of my statements and the agency’s accomplishments is unfortunate, but it will not detract from the work we have done, and will continue to do, on behalf of investors."