Their legal careers, and by extension their marriage, are the stuff of lore. Mary Jo White leads the Securities and Exchange Commission; her husband, John, practices law at an old-guard firm as elite as the corporations it represents. Together, they are a legal power couple that straddles Wall Street and Washington like few others.
Their careers, however, can at times collide, generating headaches for the S.E.C. as it pursues wrongdoing in the nation’s financial markets, according to interviews with lawyers and a review of federal records. In the nearly two years since Ms. White took over the agency, she has had to recuse herself from more than four dozen enforcement investigations, the interviews and records show, sometimes delaying settlements and opening the door, in at least one case, to a lighter punishment.
The interviews and records detail for the first time the extent of Ms. White’s recusals and the implications of her absence. When ethics rules force her out of cases, the S.E.C. loses her expertise as a former federal prosecutor who has pledged a tough line on Wall Street, underscoring the unintended consequences of recruiting government officials from the small world of the legal elite.
Ms. White has sat out of cases that involve Debevoise & Plimpton, where she worked as a defense lawyer, and her clients there, which included JPMorgan Chase and Bank of America’s former chief executive. Those restrictions, which account for most of her recusals, end in April.
But in a surprising twist, Ms. White will have to keep sitting out cases that involve her husband’s firm, Cravath, Swaine & Moore. So far, she has had to recuse herself from at least 10 investigations into clients of Cravath, interviews and records show, including some that came before Ms. White joined the agency and at least four that involved Mr. White himself.
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Bank of America requested a waiver, but Kara M. Stein, a Democratic commissioner, balked. And while the negotiations dragged on, the S.E.C. and Bank of America did not receive court approval of the underlying settlement.
Ultimately, a compromise emerged: Provide a temporary waiver. Yet while Ms. Stein praised the “breakthrough,” Mr. Gallagher lamented a “divergence from historical practice.”
Alain Delaquérière contributed reporting.
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