Credo Action

Tell President Obama: Break Wall Street's grip on the Securities and Exchange Commission

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Petition to President Obama:

"Nominate strong, independent voices with proven records of reform to fill the two open seats on the Securities and Exchange Commission, looking to current Commissioner Kara Stein as the model of a tough reformer who puts Main Street first."

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    Tell President Obama: Break Wall Street's grip on the Securities and Exchange Commission

    President Obama is poised to nominate two new commissioners to the powerful Securities and Exchange Commission (SEC), but according to reports his shortlist consists of corporate lawyers with no track record of being Wall Street reformers.1

    If the president wants to show he’s serious about cracking down on fraud and abuse, he needs to pick a nominee like current SEC Commissioner Kara Stein. Known as “Elizabeth Warren’s ally on the inside,” Stein is the one SEC commissioner who hasn’t been afraid to take on big banks, and had a proven track record of reform before being nominated.2

    But instead, SEC Chair Mary Jo White is reportedly pushing President Obama to help “dilute Stein’s influence” by appointing someone closer to Wall Street.3 We need to speak up before President Obama makes his decision – and demand another nominee just like Commissioner Stein.

    Tell President Obama: We need Securities and Exchange Commissioners who represent Main Street not Wall Street.

    By law, the five-member Securities and Exchange Commission can include no more than three commissioners of the same political party. It currently leans Democratic, but Obama’s choice for SEC Chair, Mary Jo White, is a political independent who has helped to solidify Wall Street’s grip on an agency that is already essentially captured by the big banks. While President Obama must nominate a Republican to fill the seat of Daniel Gallagher, who just announced he will resign, the president has the opportunity to show that opposition to corporate malfeasance and out-of-control banks spans both parties. But more importantly, Democratic Commissioner Luis Aguilar’s term ends in June.

    President Obama should replace Aguilar with another Kara Stein – a tough reformer willing to hold banks accountable, whom Senator Elizabeth Warren calls a “strong, independent voice.” A former Senate staffer who worked on the Wall Street reform law, Stein has criticized corporate share buybacks, and defended retail investors against big bank scams.4 Most importantly, she has tried to end the SEC’s reflexive practice of granting “get out of jail free” waivers that allow companies to keep their trusted status even after getting caught breaking the law over and over, with her fearless campaign resulting in repeated quarrels with SEC Chair Mary Jo White.5

    But instead, President Obama is said to be considering replacing Aguilar with Marlon Paz, Philip Kinda, or Keir Gumbs, all former SEC staffers who now have lucrative careers representing Wall Street clients as corporate lawyers. None share Stein’s proven track record of working to rein in out-of-control companies, and all have jobs that allow them to profit greatly by defending the same corporate clients they would suddenly be asked to regulate.6 Nominating any one of these three would be a win for Mary Jo White’s effort to marginalize Stein, and represent business as usual at a time when Americans are crying out for bold action.

    Tell President Obama: We need Securities and Exchange Commissioners who represent Main Street not Wall Street.

    While the Senate must confirm the President’s nominees, Stein’s unanimous Senate confirmation in 2013 shows that there is no reason to preemptively back down.7 Instead of holding his fire, President Obama should nominate proven reformers, with a history of fighting to rein in fraud, recklessness, and abuse, especially for the Democratic seat – and dare Republicans to side with Wall Street companies against the interests of middle class Americans.

    Tasked with protecting investors and maintaining fair markets, the SEC oversees private equity firms, big banks, and everything in between. Its control over whether to grant waivers to criminal corporations gives it outsized influence among regulators, while its industry-friendly outlook, regular delays, and failure to implement even simple rules make it one of Wall Street’s go-to places to kill reform. The Securities and Exchange Commission is simply too important to put anyone but proven reformers in charge.

    Tell President Obama: We need Securities and Exchange Commissioners who represent Main Street not Wall Street.

    Thank you for speaking out.

    1. David Michaels and Robert Schmidt, “SEC’s Gallagher to Resign as Commissioner After Four Years,” Bloomberg, May 12, 2015.
    2. Patrick Temple-West, “Elizabeth Warren’s ally on the inside,” Politico, May 18, 2015.
    3. David Michaels and Robert Schmidt, “The Agency That Barely Moves,” Bloomberg, May 21, 2015.
    4. Temple-West, “Elizabeth Warren’s ally on the inside.”
    5. Michaels and Schmidt, “The Agency That Barely Moves.”
    6. Patrick Temple-West, “Liberals push back on possible White House picks for SEC Democrat back,” Politico Pro, May 27, 2015.
    7. Bruce Carton, “Senate Confirms Stein and Piwowar as New SEC Commissioners,” Compliance Week, August 2, 2013.