(Corrects Levitt’s position at Promontory in fourth paragraph.)
U.S. Securities and Exchange Commission Chairman Mary Jo White is sending the right signal by saying the agency will seek more admissions of wrongdoing in enforcement cases, said Arthur Levitt, a former SEC chairman.
“Mary Jo did exactly what she should have done,” Levitt, 82, said today in an interview on Bloomberg radio. “She’s going to be selective in terms of egregious cases where she’s really going to go for the gold.”
White, a former Debevoise & Plimpton LLP partner who took over the SEC in April, said on June 18 that the regulator would seek more admissions of misconduct as a condition of settling cases. Typically, the SEC allows subjects to neither admit nor deny wrongdoing, a practice that has drawn fire from lawmakers, consumer groups and jurists.
“What’s she saying is, we’re going to pick a case and make an example of it,” said Levitt, who is an adviser to Promontory Financial Group LLC and a Bloomberg LP board member. “I don’t think that means that 50 percent of cases will get litigated, we may be talking about 2 or 3 percent. She’s sending exactly the right signal.”
White said that admissions of wrongdoing could be useful in sending “as strong a deterrent message out there as you possibly can.”
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