Despite Critics Mary Schapiro Could Shine at SEC
While Wall Street Bull Is Comatose, Her Skills Could Reform Markets
Apr 18, 2009
According to the "Wall Street Journal" of January 7, this was supposed to be a tough inquiry, one laced with questions on her suitability to manage securities and trading exchanges in the US. However, the session displayed little rancor and no damaging surprises, in the view of USLaw.com and others.
Is She the Fox Guarding the Hen House?
In the wake of the current financial crisis of confidence in Wall Street, where she has established close working ties over the years, naysayers are second guessing her confirmation as tantamount to appointing a fox to guard the hen house.
The online newspaper COUNTERPUNCH of March 30 said, "Where's Eliot Spitzer Now That We Need Him?" The article went on to call Ms. Schapiro a political toady and asked for President Obama to find somebody like the tough, ex-NY states attorney Spitzer to replace her.
Her Resume Suggests She Is a Quintessential Washington Insider.
Before her confirmation, most recently she was CEO of the Financial Industry Regulatory Authority (FINRA), the largest non-governmental regulator for all securities firms doing business with the US public. It is part of an association of securities brokers and dealers who have managed to retain regulation of themselves, although it comes under the mantle of the SEC.
The issue that most rankles her detractors arises from President Obama's assertions during his campaign that Washington needed to do things differently. Therefore, to many observers it seemed a non sequitur to nominate Ms.Schapiro, who has managed regulatory bureaucracies for over 20 years.
Even so, Ms. Schapiro would seem the ideal candidate. She possesses over 20 years of hands-on experience in securities regulation, and was once before a commissioner of the five-member SEC Commission, as she will be again as Chair of the regulatory body.
Her resume is impressive:
- In 1996 she became head of the broker/dealer self-regulator, NASD Regulation, a predecessor of FINRA. She was named Vice Chair in 2002; and ascended to NASD's Chair and CEO post in 2006. When NASD was consolidated with the NYSE Member Regulation in 2007 to form FINRA, Ms. Schapiro was instrumental in the negotiations.
- Some years before her association with the entities that became FINRA, she was appointed Chair of the federal Commodity Futures Trading Commission (CFTC), in 1994 by President Bill Clinton. The CFTC is responsible for regulating US futures markets. As Chair, she participated in the President's Working Group on Financial Markets, with the Secretary of the Treasury and the Chairs of the Federal Reserve Board and the SEC.
- Previously Ms. Schapiro served for six years as a Commissioner of the Securities and Exchange Commission. President Ronald Reagan appointed her to that post in 1988. President George Herbert Walker Bush reappointed her in 1989 and President Bill Clinton named her Acting Chair in 1993.
How Did So Many Outrages Occur on Her Long Watch?
Counting six years as an attorney for CFTC early in her career, she has put in nearly 30 years in the bureaucratic trenches of Washington, D.C. In the eyes of many critics, the most questionable issue about her suitability for the job is how so many financial scandals occurred while she was in positions at the highest levels to be a whistle blower.
She has tried to assuage this issue. On March 26, when she returned to address the Senate Committee on Banking, Housing and Urban Development, she reassured them of her commitment to investor protection in the following words:
. . . "Congress created only one agency with the mandate to be the investors' advocate . . . as Justice Douglas pointed out long ago, only the SEC has the mission, and the privilege, of serving as 'the investors' advocate.'"
John Sweeney, CEO of the AFL-CIO, strongly endorsed her nomination. He said, "We believe Mary Schapiro will bring a sense of urgency to rebuilding and strengthening the SEC."
The Senate agreed for they confirmed her unanimously.
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