Here's What Elizabeth Warren And The SEC Are Really Fighting About

WASHINGTON -- Sen. Elizabeth Warren (D-Mass.) stunned Wall Street this week with a scathing letter to Securities and Exchange Commission Chair Mary Jo White. The letter said White had been soft on high finance felons, but raised eyebrows in the nation's capital for another reason -- publicly accusing White of "misleading" Warren in a private meeting.

White identifies as a political independent and frequently votes with the SEC's Republican commissioners, creating a 3-2 majority that thwarts the agency's Democratic appointees. The commission has granted a host of waivers shielding big Wall Street banks from what would have been the automatic consequences of wrongdoing. Warren's letter cited a recent SEC decision, which shielded multiple banks that had pleaded guilty to felonies from additional regulatory scrutiny, and limited their liability in fraud cases.

Nobody in the nation's capital is flipping a wig over the SEC's enforcement record, whatever the eventual consequences may be. But lying to a senator is a big no-no under Washington etiquette. And Warren's letter came very close to suggesting that White did exactly that.

The conflict concerns a May 21 meeting between Warren and White. The SEC acknowledged to HuffPost that White promised to implement a rule on CEO pay disclosures by "the fall." But Warren was incensed to learn that on the same day the meeting took place, the Office of Management and Budget had published SEC plans that postponed the rule's implementation from the fall of 2015 until April 2016.

The rule would require companies to disclose a simple pay ratio in statements to investors. The ratio would compare the median pay of a company's workers to that of its CEO. The 2010 Dodd-Frank Wall Street reform law required the SEC to craft and implement the rule.

The SEC told HuffPost that the apparent conflict between the agency's public plans and private promises was simply a misunderstanding. "Chair White is still committed to completing the rule by the time frame she committed to Sen. Warren, which is by the fall," an SEC official said.

Regulatory agencies sometimes have beaten the time projections they send to OMB. But that hasn't been the case on the CEO pay rule that Warren and White were discussing.

In the fall of 2013, after White took over as SEC chair, the agency said it would have the rule in place by October 2014. The commission reiterated the projection in the spring of 2014.

The SEC missed the self-imposed deadline. In the fall of 2014, the commission said it would implement the rule in October of 2015.

Democratic senators weren't happy. In December 2014, 15 of them sent a letter to White urging her to implement the rule by March 31, 2015. Multiple senators cried foul in April, when the rule remained dormant.

Warren's office was happy to accept the SEC's pledge to finish the rule by the fall.

"In the OMB report released two weeks ago, the SEC predicted that it would be delaying the rule until April 2016, so Senator Warren is pleased that the SEC has reversed course and is now publicly committing to finish the rule this fall," Warren spokeswoman Lacey Rose told HuffPost Wednesday. "After years of delays and broken promises, the Senator is hopeful that this time, the SEC will actually follow through on its commitment and complete the work it was directed by Congress to do nearly five years ago."



Elizabeth Warren