Businesses are in the habit of making amends for their errors without actually admitting they made any errors.  Weasel words hide a multitude of sins; “mistakes were made” and “customers were affected.”  A company can agree to pay millions of dollars to rectify a mistake or action they do not legally agree to having made. It’s a legal tangle that would be funny if it weren’t tied to so much real-world wrong: “Here’s a billion dollars to fix a crime that we don’t acknowledge we committed.”

In an interview with the LA Times, Securities and Exchange Commission Chairwoman Mary Jo White talks about getting large companies actually to confess their wrongdoing, as well as other changes she’s been brining to the SEC since taking over the top position in April, 2013.

The agency has more power than it has perhaps been using, White explains.  “I think what I brought from the private sector was a real appreciation of how much leverage — respect, if you will — that the SEC has,” White told the Times.  “Major companies, in particular, really don’t want to be at war with their primary regulator. The SEC may not have appreciated just how great our leverage is.”

And as part of that leverage, White wants wrongdoers to ‘fess up when they’ve done wrong. Being “sorry” isn’t enough, she explains:

What we are focused on is the enhanced public accountability and the admission of the conduct, the wrongdoing. That’s the most effective kind of admission, frankly. I know in the past there have been criticisms of other agencies where the admission has taken the form of an apology only.… An apology is easy. We want you to admit what you did.

The SEC did just that with JPMorgan Chase, requiring the megabank to admit it broke securities laws during the “London Whale” trading disaster–an admission that was joined by $1 billion in penalties.

Last year, then-new Chairwoman White was one of the regulators who felt the sting of Senator Elizabeth Warren’s questions about the lack of accountability in regulatory settlements with big banks, writing in a letter to that she was “interested in learning more about how your institution has evaluated the cost to the public of settling cases without requiring an admission of guilt rather than pursuing more aggressive actions.”

In the full interview, White touches on the problems the SEC needs to tackle, fear of and respect for regulators, and how investigating financial crime is like investigating terrorism.
SEC’s Mary Jo White wants companies to fess up [LA Times]

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