Image: Mary Jo White and President Barack Obama © Carolyn Kaster, AP Photo

Mary Jo White and President Barack Obama

Mary Jo White, President Barack Obama's pick to be the top regulator for Wall Street, is about to get the "new teacher" treatment.

And while that may sound foreboding, it's really a reason for hope.

After four-plus years of lukewarm leadership at the Securities and Exchange Commission, the big financial institutions have their swagger back. They've effectively fought off or stalled new regulation. They've paid their way out of the mortgage mess with settlements that are either too small or have come too late for the victims.

No one's gone to jail -- or even served time in detention.

And rather than being humbled by what can be described generously as their own incompetence, the industry's leaders are instead blaming the victims.

For example, the comments last week from JPMorgan Chase (JPM) Chief Executive Jamie Dimon. When asked about regulation and pressed about his bank's transparency at a World Economic Forum panel, Dimon bristled. "It's going to be another five years of pointing fingers, scapegoating, using misinformation," he said.

And about those massive trading losses suffered by his bank last year, Dimon said, "Life goes on."

Yes, like kids in a classroom who sense a lack of authority, executives have been able to say and do pretty much what they want.

Enter White. Though she is slated to be the top securities cop, not a banking regulator, she's going to be policing the playground where these guys make much of their money: trading and underwriting.

Mary Schapiro, who led the SEC until December, was the substitute teacher brought in by an administration that seemed less interested in reining in financial abuse than in shoving a national health-care plan down our throats. Not that reforming health care isn't important, but it's akin to trying to cure a nation's cancer when it's suffering from gunshot wounds.

So, how will White respond?

Well, there are good signs and bad ones. You probably know the good: White was a tough-as-nails prosecutor who tackled the likes of John Gotti and al-Qaida.

The bad: White didn't have any meaningful Wall Street cases in her tenure as U.S. attorney for the Southern District of New York. In private practice, she defended JPMorgan in financial-crisis cases. She also lobbied the SEC to drop a possible insider-trading probe that ensnared Morgan Stanley's (MS) chief, John Mack.

That baggage has led some, including Salon's David Sirota, to dismiss White as another industry "enabler" and beneficiary of the revolving door that creates conflicts for public servants who seek riches and connections in the industry's they once, or in this case, will oversee.

Moreover, White has another problem. Her husband, John W. White, is a partner at the powerhouse Wall Street law firm Cravath Swaine & Moore. His resume includes work with public companies and accounting issues over which the SEC potentially has some jurisdiction.

For those interested in seeing uncompromised regulation of the securities business, these are more than just red flags. White, it appears, has not only been playing with the class bullies, at times she's been one of them.

But rather than impede effective regulation, White's coziness could help her.

For one, she knows the game. Second, she will be under intense scrutiny. White's been heralded as a tough prosecutor whose nomination, in the words of many observers, has "sent a message" to Wall Street. White will be under pressure from day one to ferret out wrongdoing. Given the amount of irresponsible behavior on Wall Street -- MF Global (MFGLQ), the "London Whale" -- since the financial crisis, it's still fertile ground for vigorous prosecution.

Moreover, if White is the political climber her critics have made her out to be, she'll be motivated to bring down some big game and names.

Investors have seen enough weak SEC chairs to know White represents the potential to settle this unruly class.

The agency under Christopher Cox, who served from 2005 to 2009, largely overlooked or was slow-footed in pursuing insider-trading and securities-fraud cases. Schapiro made some progress in those areas, but her multiple failures in rule-making and her proclivity to charge institutions rather than individuals only enhanced her reputation as a bureaucrat.

The reality is that bullies are running the Wall Street classroom. And given Obama's lackluster picks for regulatory jobs -- Jack Lew, Timothy Geithner and Schapiro -- White at least has the tools and the experience to be a threat, and make good on those threats.

Sure, there's the potential for disappointment, but there's also potential for teaching these kids a lesson. 

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