Challenges Facing Next S.E.C. Chief

Mary Jo White got a friendly reception during testimony before the Senate Banking Committee on Tuesday, moving closer to becoming the next leader of the Securities and Exchange Commission. But even her supporters on Capitol Hill highlighted the significant challenges that would await her in that role, DealBook’s Ben Protess writes.

Striking a confident tone, Ms. White pledged to tackle enforcement actions and unfinished regulation, though she offered little detail. “She did, however, signal a flexible approach to reforming money market funds, an approach that could draw scrutiny from investor advocates and liberal lawmakers.” While the agency’s former leader, Mary L. Schapiro, had been tasked with restoring legitimacy to the S.E.C., now “lawmakers say that Ms. White must elevate the agenda to take on topics outside her predecessor’s regime. Ms. White, for example, vowed to examine the growing world of high-frequency trading, an issue that continues to confound the agency.”

Lawmakers also pressed Ms. White to explain how she would navigate potential conflicts of interest. Ms. White, who represented financial clients after her tenure as a federal prosecutor, said her work for Wall Street “does not change me as a person. It doesn’t mean I embrace the policy thoughts of any of my clients.” Going forward, she said, “The American public will be my client, and I will work as zealously as is possible on behalf of them.”

TWINKIES BRAND LIVES TO FIGHT ANOTHER DAY  |  Hostess Brands struck a $410 million deal to sell a collection of snacks — Twinkies, Ding Dongs, Ho Hos, Sno Balls and Dolly Madison Zingers — to Apollo Global Management and Metropoulos & Company, two firms with experience in corporate turnarounds. “The sale will mean that Twinkies, born more than 83 years ago in an Illinois industrial kitchen, will live on, having survived wars, recessions and the South Beach and Dukan diets,” DealBook’s Michael J. de la Merced and Peter Lattman write. C. Dean Metropoulos, leader of the firm that bears his name, is expected to become chief executive of the snack business.

“We saw a real opportunity to revitalize these brands, just with some T.L.C.,” Daren Metropoulos, one of Mr. Metropoulos’s sons and an executive at the family firm, told DealBook. That effort may include marketing efforts that resemble those for Pabst Blue Ribbon, which Metropoulos & Company owns. Social media may play a role, and comedians like Zach Galifianakis may be brought on as spokesmen. The deal includes five Hostess factories, and the new company will probably feature the Hostess name.

The field of potential buyers once seemed crowded, but by the deadline on Monday, the only qualified offer came from Apollo and Metropoulos. “It’s not that we lacked interest,” Gregory F. Rayburn, the Hostess chief executive, said in an interview. “Other bidders felt that they could not top the price.”

WHEN SPINOFFS ARE A DUMPING GROUND  |  “A spinoff is a product of Wall Street math that says one plus one can equal three. Yet as shareholders of Time Warner may be about to find out, it can also be all about subtraction, as a company ditches an unwanted business, in this case, magazines,” Steven M. Davidoff writes in the Deal Professor column.

As deals by General Motors and Ford Motor show, it can be tempting to attach liabilities to the company being spun off. “This is often management’s best opportunity to burnish its own company at another’s expense. It’s hard to resist.” Mr. Davidoff continues: “The reason a spinoff is a preferred way to get rid of businesses a company no longer wants is that shareholders have no choice in the matter. The decision is simply made by the board.”

ON THE AGENDA  |  Gary Gensler, chairman of the Commodity Futures Trading Commission, speaks at the Futures Industry Association conference in Boca Raton, Fla., at 8 a.m. A House Financial Services subcommittee conducts a hearing about mortgage insurance at 10 a.m. Data on retail sales in February is out at 8:30 a.m. Hot Topic, which recently agreed to sell itself to Sycamore Partners, reports earnings after the market closes. Martha Stewart is on CNBC at 2 p.m.

CARLYLE LOWERS BARRIER TO ENTRY  |  The Carlyle Group is lowering the bar for investors to participate in its private equity buyouts. Trying to reach a broader base of customers, Carlyle is preparing a new fund with a minimum investment of $50,000, compared with minimums of between $5 million and $20 million previously, The Wall Street Journal reports. (The opportunity will be available to “accredited” investors.) The move comes after other private equity giants have begun offering products for individual investors, but “in moving down-market to attract new funds, Carlyle and other firms could face questions from some institutional and ultrarich clients drawn to such firms partly for their exclusivity,” The Journal writes.