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"Obama is not going to clean up financial corruption by pinning a sheriff's badge on Wall Street's protector-in-chief." Thus speaks San Diego attorney Gary Aguirre about today's report from Bloomberg News that Mary Jo White is under consideration to head the Securities and Exchange Commission (SEC). Aguirre, who won a big lawsuit against the SEC, and was exonerated by two Congressional committees and the SEC's own investigative team, now represents whistleblowers who challenge wrongdoing inside the agency that was created in the 1930s to protect the public from Wall Street, and now protects Wall Street from the public.

Mary Jo White epitomizes the method by which Wall Street lawyers control the so-called regulatory agency. The method is called the "revolving door." There are two ways the scam works: 1. A big Wall Street law firm will represent a crook who has stolen money from the public in a securities scam. The law firm gets its client off the hook by dangling a $2 million-a-year job in front of the SEC lawyer who is in charge of the case; 2. When the SEC is looking for someone to head its enforcement branch, it will choose a Wall Street lawyer who represents the crooks, rather than someone inside the agency who sincerely wants to chase bandits.

If President Obama names Mary Jo White to head the agency, she would represent both sides of the revolving door phenomenon. She was the U.S. Attorney for the Southern District of New York, which is responsible for policing Wall Street. Then she joined the law firm of Debevoise & Plimpton, which defends securities miscreants, among other things. If she went back to a government role, she will have come full circle, and Americans would be justified in having even more cynicism about the agency than they have now.

Gary Aguirre has had personal experience with her. After a successful law career in San Diego, he retired, but got restless. He boned up on securities law and joined the SEC. He had excellent reasons to believe that a now-defunct hedge fund had talked with John Mack, formerly associated with the hedge fund, about an upcoming acquisition. The hedge fund made a bundle betting on the acquisition. Aguirre thought that Mack should be interviewed. Mary Jo White covertly contacted top people in the SEC on Mack's behalf. Aguirre was fired. Mack went on to head Morgan Stanley. The two Congressional committees and the SEC's own investigator vindicated Aguirre, who won the suit against the agency. Now, according to Bloomberg, White might rejoin the government. If she is indeed a candidate, I for one hope this story will be repeated and repeated and repeated in the vetting process.

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Comments

Visduh Jan. 17, 2013 @ 8:57 p.m.

Don, I hate to rub it in, but as you quote Gary Aguirre, "Obama is not going to clean up financial corruption . . . " If you were hoping for reform from this president, you won't get it. 'Nuff said.

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Don Bauder Jan. 18, 2013 @ 8:38 a.m.

Visduh: He sure didn't clean up Wall Street corruption in his first term. George W. Bush and he sent trillions of dollars to the banks but spent a pittance on consumers. When Obama named Geithner, Summers, et al to top posts, it was obvious that the administration was in Wall Street's pocket; it was going to be business as usual. It was. The only thing I can say is that McCain and Mitt Romney would have been ten times worse. Best, Don Bauder

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SurfPuppy619 Jan. 18, 2013 @ 8:51 a.m.

Don, you and Gary Aguirre described it perfectly.

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Don Bauder Jan. 18, 2013 @ 11:41 a.m.

SP: Keep the chin up: Teddy Roosevelt begged for Wall Street money before his 1904 election, then after winning turned around and busted the trusts. Steel baron Henry Frick uttered famous words: "We bought the son of a bitch but he didn't stay bought." Best, Don Bauder

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Twister Jan. 18, 2013 @ 6:09 p.m.

"Agitate, agitate, agitate." --Frederick Douglass

If color mattered, the irony would be forged in steel.

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Don Bauder Jan. 18, 2013 @ 7:46 p.m.

Twister: Maybe in these days of a Lincoln Reawakening, we can go back and study those famous debates. Best, Don Bauder

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Don Bauder Jan. 24, 2013 @ 8:46 a.m.

OBAMA PICKS WHITE. Media are reporting this morning (Jan. 24) that President Obama has picked Mary Jo White to head the SEC. Best, Don Bauder

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Don Bauder Jan. 25, 2013 @ 4:57 p.m.

TAIBBI LASHES OUT AT WHITE CHOICE: Matt Taibbi, the best financial columnist these days, picked up the story of White's appointment today (Jan. 25) in Rolling Stone. Gary Aguirre, who frequently works with Taibbi, gave him the same quote that he gave me a week ago. Taibbi's story goes into more detail on White's slimey role in a case that Aguirre was following. This story has been told in previous columns here, as well as by Taibbi. Hopefully, Taibbi's account will alert some other journalists. Best, Don Bauder

See: http://www.rollingstone.com/politics/blogs/taibblog/choice-of-mary-jo-white-to-head-sec-puts-fox-in-charge-of-hen-house-20130125

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SurfPuppy619 Jan. 25, 2013 @ 8:26 p.m.

Matt Taibbi, the best financial columnist these days..

When the bets financial journalist works at Rolling Stone Magazine you know we have lost our way-and Taibbi IS the best.

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Don Bauder Jan. 26, 2013 @ 7:05 a.m.

SP: There are some other good ones -- Gretchen Morgenson of the NY Times, James Surowiecki of the New Yorker, several others on the NY Times and some on the Wall Street Journal, for example. Best, Don Bauder

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