Some things never change. As sure as the sun rises, we see the same dog and pony show every time there is a change of leadership at the SEC. The new chairman, who has had a distinguished career on Wall Street and in regulatory affairs, comes into office with great fanfare, delivers a series of stern speeches about how abuse will not be tolerated, and then it’s back to business as usual until the next compromised eunuch comes stumbling through the revolving door to assume the post.

SEC whistleblower United States

The revolving door

William D. Cohan’s new piece on Bloomberg takes a look at Mary Jo White, the new SEC chairperson, to break down her bona fides and assess whether she is the real deal or not. Cohan’s first point is that White is clearly a part of the Wall Street-Washington DC revolving door, and has to prove with her actions that she is different from her predecessors.

He says: “During her long legal career, White has ping-ponged between the U.S. attorney’s office in Manhattan and Debevoise & Plimpton LLP, the Wall Street law firm. Her husband, John White, has also bounced between the SEC and Cravath, Swaine & Moore LLP, another prestigious Wall Street law firm”

The Ben-Atzi case

Cohan also suggests keeping an eye on the civil case of Eric Ben-Artzi, an analyst turned whistle-blower at Deutsche Bank AG (NYSE:DB) (ETR:DBK) in New York. The SEC is currently investigating Ben-Artzi’s claims that Deutsche Bank inflated the value of the CDO portfolios in 2008 and that he was fired when he brought up the situation with his superiors (who discouraged him from making the claim).

He argues that if the White-led SEC vigorously pursues Deutsche Bank AG (NYSE:DB) (ETR:DBK) for misrepresenting its finances before and during the financial crisis as alleged by Ben-Artzi, then we will have some idea if Mary Jo White is the real deal. If the case case languishes or the usual slap on the wrist fine is the final comeuppance, then we’ll know that White is no different from her predecessors and that the SEC remains captured by the ever-revolving door.

The degree to which the revolving door problem pervades the SEC and the entire regulatory establishment can also be seen in the fact that one of the people at Deutsche Bank AG (NYSE:DB) (ETR:DBK) who tried to convince Ben-Artzi to stop pursuing his claim was Robert Rice, the head of governance, litigation and regulation in the Americas for Deutsche Bank at the time. Rice now works as White’s chief counsel at the SEC.