As Manhattan's top federal prosecutor during the 1990s, Mary Jo White could have sought the corporate equivalent of the death penalty: indicting Prudential Securities Inc. for fraudulently marketing $8 billion in ruinous energy partnerships to small investors.
Instead, Prudential's attorneys pressed Ms. White, who had earned notice as an aggressive litigator in terrorism and organized crime cases, to consider something less punitive. She ultimately accepted, agreeing to a $330 million fine and placing Prudential on probation, allowing it to avoid criminal charges.
"We persuaded them there was an unacceptably high risk that charging Prudential Securities would lead to significant losses for the innocent shareholders," said Scott Muller, a New York defense attorney who represented Prudential. "What she avoided was inappropriate collateral damage."
How Ms. White handled the Prudential case belies her notoriety as a brass-knuckle prosecutor -- a reputation stoked by President Barack Obama last month when he nominated her to be chairman of the U.S. Securities and Exchange Commission.
Mr. Obama picked her to lead an agency that's been criticized by lawmakers, consumer groups and jurists including U.S. District Court Judge Jed Rakoff for bringing few cases against top executives of major banks in the wake of the 2008 credit crisis and for settling enforcement cases without requiring a defendant to admit guilt.
"You don't want to mess with Mary Jo," the president said.
Ms. White's record on white-collar cases reveals a more practical streak. Her invention of corporate probation, or deferred prosecution, in the Prudential matter was later copied by scores of U.S. attorneys seeking punishment for a company without going to trial.
Since stepping down as U.S. Attorney for the Southern District of New York in 2002 and returning to practice as a Wall Street defense lawyer, Ms. White, 65, has spoken out against what she called a "feeding frenzy" of enforcement after financial scandals.
Defense lawyers and former colleagues in the prosecutor's office say the Prudential case and Ms. White's comments don't indicate she would pull punches on corporate wrongdoing.
"She is ethical and smart and she doesn't come with a bias," said Sara E. Moss, who worked with Ms. White as a prosecutor during the late 1970s and is now general counsel of The Estee Lauder Cos Inc. "She would be an incredibly zealous public servant for the SEC."
As a young federal lawyer, Ms. White was competitive in the courtroom, as well as on the office's women's basketball team, where she was a scrappy 5-foot forward. Later, as Manhattan's leading terrorism prosecutor, she battled Washington to keep control of terror cases, including those stemming from the Sept. 11 attacks.
While New York has always been the premier base for prosecuting Wall Street fraud, Ms. White doesn't have a record on financial regulation. Seven of the last eight SEC chairmen have been securities lawyers or had careers on Wall Street.
"Where she's going to be more challenged is in areas that are not as familiar to her, dealing with the complexities of market regulation and the disclosure regime," said John F. Olson, a partner at Gibson, Dunn & Crutcher LLP who has known Ms. White for 20 years.
Ms. White, who declined to comment for this story, has met in recent weeks with other SEC commissioners, said Luis Aguilar, one of the commission members. She will be expected to be conversant on a complex array of regulations and thorny questions about the structure of securities markets when she appears before the Senate Banking Committee, which could be the week of March 11.
"She will throw herself into this," Ms. Moss said. "She works around the clock, and she's never really stopped doing that."
Over 38 years, Ms. White has rotated between two homes as a lawyer: the midtown Manhattan headquarters of Debevoise & Plimpton LLP and the downtown base of the U.S. attorney's office.
At Debevoise, which counts former Attorney General Michael Mukasey as a partner, her clients have included Wall Street banks such as JPMorgan Chase & Co., Morgan Stanley, and UBS AG. She also represented former Bank of America Corp. Chief Executive Officer Ken Lewis during an SEC probe of bonuses paid to Merrill Lynch & Co.'s executives before Bank of America bought the brokerage.
Ms. White's salary at Debevoise last year was $2.4 million, according to her financial disclosure report. Investor advocates have been uneasy with her recent career as a Wall Street defense attorney, even as they respect her bona fides as a prosecutor.
"The real question will be, can she switch her hat, and start to represent the public rather than the business community she's been representing for the last 10 years?" said Lynn Turner, a former SEC chief accountant who is active in many regulation debates.