Obama sends tough prosecutor to police Wall Street

Obama sends tough prosecutor to police Wall Street

After weeks of vetting, courting and grappling, it appears that President Obama finally found his top cop for Wall Street. And no, it wasn’t someone who can easily be identified with the industry — unless you consider organized crime and terrorism branches of modern finance.

There will be no Sallie Krawcheck, the former brokerage chief at Citigroup Inc. C +1.86% and Bank of America Corp. BAC +0.96% . It won’t be Mary Miller, the official in a Treasury Department considered cozy with bank interests. It wont be the internal candidate, enforcement chief Robert Khuzami — who has surprised Securities and Exchange Commission critics by tackling the chronic insider-trading problem. Read full story on Mary Jo White’s nomination .

President Obama, perhaps trying to assuage critics who argue he’s been to lenient on the Street, will nominate Mary Jo White, a former prosecutor. You think Steve Cohen is intimidating? White took on mob boss John Gotti and al Qaeda.

White’s reputation and career is a stark contrast to predecessor Mary Schapiro, a career bureaucrat who was viewed generously as a pragmatist. The critical view was that she may have been decent manager, but as a leader was ineffective and too easily pushed around — as her losing fight to regulate money market funds this summer revealed.

White won’t be and shouldn’t be taken lightly. A 2002 interview with PBS revealed White to have an excellent relationship with the Federal Bureau of Investigation. And she spoke in terms of getting bad guys, not working with them: “We know who to look for, how they operated, where they operated,” she said of the terrorists. Read transcript of White’s interview on terrorism .

In some ways, her task taking on the bad guys of finance will be tougher. Unlike gangsters and terrorists, insider traders and fraudsters will argue that they’re doing things the American way — through their high-priced attorneys. Big institutions will lobby against her dictums the way Fidelity Investments did this summer.

But you can bet the public and investors will be better served by White than Krawcheck.