Thursday, December 18, 2008


Wall Street Journal - President-elect Barack Obama has chosen Mary Schapiro, chief executive of a securities-industry regulator for securities firms, to lead the Securities and Exchange Commission. . . Ms. Schapiro, 53 years old, will take over an agency beset by problems, from its failure to catch red flags in the alleged $50 billion Madoff fraud to accusations of lax oversight of Wall Street banks. . . .

She was credited with beefing up enforcement while at the National Association of Securities Dealers and guiding the creation of the Financial Industry Regulatory Authority, which she now leads. But some in the industry questioned whether she would be strong enough to get the SEC back on track. . .

She rose to head the NASD and oversaw its merger with the regulatory unit of the New York Stock Exchange counterpart to create Finra.

Robert Glauber, a former chief executive of the NASD who is a visiting professor at Harvard Law School, said Ms. Schapiro's "vast and broad experience" as a regulator will be "invaluable as the regulatory restructuring process goes forward." Related

Robert Banks, a director of the Public Investors Arbitration Bar Association, an industry group for plaintiff lawyers, had a more critical view. He said that under Ms. Schapiro, "Finra has not put much of a dent in fraud," and the entire system needs an overhaul. "The government needs to treat regulation seriously, and for the past eight years we have not had real securities regulation in this country," Mr. Banks said.

Since Ms. Schapiro took over Finra in 2006, the number of enforcement cases has dropped, in part because actions stemming from the tech-bubble collapse ebbed and the markets rebounded from 2002 to 2007. The agency has been on the fringe of the major Wall Street blowups, and opted to focus on more bread-and-butter issues such as fraud aimed at senior citizens.

Out of the gate, Ms. Schapiro faces potential controversy. In 2001 she appointed Mark Madoff, son of disgraced financier Bernard Madoff, to the board of the National Adjudicatory Council, the national committee that reviews initial decisions rendered in Finra disciplinary and membership proceedings. Both sons of Mr. Madoff have denied any involvement in the massive Ponzi scheme their father has been accused of running.


At December 19, 2008 3:27 AM, Anonymous robbie said...

I think it's ironic that the Wall Street Journal would print a criticism of Ms. Schapiro that says she is lax on regulation.

At December 19, 2008 5:55 AM, Anonymous Colin Brace said...

File under "fox in the chicken coop".


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