Elisse Walter is capable enough, but what the SEC needs is a Chairman with **Star Quality - An Impact Player**

Mary Jo White is a Star, but her 'Conflict of Interest' Issue Needs to Play Out Before We Know Where Her Nomination is Going.

[ by Melanie Gretchen and Howard Haykin ]

Reports of SEC Chairman Elisse Walter 'demise' or departure are premature.  With President Obama's nomination for SEC Chairman, Mary Jo White, standing in the wings, Ms. Walter is not setting any self-imposed deadlines on herself:

"I will certainly be here until the new chairman gets confirmed and comes onboard.  I have sort of decided not to think about it right now. That may be a very short time. It may be a very long time." -- Ms. Walter, on the sidelines of a meeting of the SEC's Advisory Committee on Small and Emerging Companies.

Hey, let's get one thing straight.  Mary Jo White is no shoo-in.  Sporting a list of conflicts of interest as long as a summer's day,  Ms. White's nomination is being questioned by the very people whom everyone would presume are in her corner.  How strong is the "COI" issue?  Look back 16 months ago, when MF Global collapsed and a shortfall of customer funds was discovered - ranging from $600 million to $2 billion.  With the CFTC preparing to for its biggest investigation in history, Chairman Gary Gensler opted to recuse himself because of his "COI" issue with then-CEO of MF Global, Jon Corzine.  Gensler had been a partner at Goldman Sachs when Jon Corzine led the company - just prior to Goldman going public.  CFTC Chairman Gary Gensler took a public relations bath. 

Elisse Walter succeeded Mary Schapiro as Chairman of the SEC in December 2012.  Up until the time that President Obama nominated Ms. White, it was presumed that Ms. Walter might hold that position at least until December 31, 2013.  Yet, we can't recall Ms. Walter's name on the short list of candidates being considered for SEC Chairman on a full-term basis.   Robert Khumazi, Rick Ketchum and Sally Krawcheck were the names that people readily mentioned.  When Khumazi learned he would not be nominated for the post, he announced plans to leave the SEC.

Yet, These Are Critical Times for the Financial Industry.   The SEC and the financial industry face sweeping changes - in (i) market structure; (ii) products and securities;  (iii) use of technology;  (iv) control of technology;  (iv) regulatory reforms.  Yet, the SEC is operating short-handed, with just one chairman and 3 commissioners.  Besides the fact that even numbers don't work well in voting on new securities regulations. 

For that reason, it's necessary to bring on a fifth individual to serve as Commissioner or as Chairman of the SEC.  And it must be done now.  And that person must have "star quality" - be an impact player. 

It won't happen with a new Commissioner.  No, the Obama administration must choose a Chairman - it's an opportunity that comes about just once every 4 or so years.  Conflicts of interest or not, Mary Jo White will likely be pushed through the nomination process.  If the "nays" block Ms. White's nomination, a person like Sally Krawcheck would fit the bill. 

As for Elisse Walter, she seeks normalcy.  "What I want to think about is what work I have to do when I get up in the morning. The other is something I will leave as a decision for later."

For further details, go to [Reuters, 2/1/13].