Alex Wong/GETTY IMAGES - Schapiro, a longtime regulator, took over as head of the agency in January 2009, when the country was steeped in financial crisis. The chief financial regulator worked to restore trust in the agency.
Securities and Exchange Commission Chairman Mary L. Schapiro said Monday that she will step down in mid-December, ending a four-year tenure that began in the rough-and-tumble days of the financial crisis and came to be defined by it.
President Obama designated Elisse Walter, one of the SEC’s Democratic commissioners, as Schapiro’s replacement for now. But people familiar with the administration’s plan expect the president to nominate a permanent successor soon.
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The new SEC chief will adopt an agency saved from the brink of extinction under Schapiro’s watch. When she took the job in January 2009, the agency’s reputation was in tatters. Its failure to police Wall Street or detect Bernard Madoff’s massive Ponzi scheme had critics calling for its dismantling. Even Schapiro’s detractors credit her for making the agency relevant again under the most difficult conditions in its recent history.
But unfinished work presents knotty challenges. Critics say that under Schapiro, the SEC never fully reckoned with the financial crisis or the shortcomings that created it. It failed to punish key Wall Street figures, negotiate enough meaningful settlements with the large institutions they ran or crank out most of the regulations required of it by the Dodd-Frank overhaul measure enacted in 2010.
Meanwhile, the May 2010 “flash crash” — in which high-speed computer trading accelerated a plunge in stock values — and other glitches such as the botched public offering of Facebook are raising questions about whether the SEC can keep up with the tech-savvy traders and markets it oversees. While some other countries are moving to rein in high-speed trading, the SEC has not.
Schapiro dismissed the criticism and released several pages listing the SEC’s achievements, including an overhaul of the enforcement unit, which brought a record number of actions in each of the past two years and has returned a record $4.5 billion to harmed investors since fiscal 2010.
The agency that was once on the chopping block has gained new authority from Congress, created a whistleblower program to gather tips and complaints, and engaged in one of the most active periods of rulemaking in decades, Schapiro said. “I feel great about the last four years,” she said in an interview. “I knew the most important thing I could do was steer the agency out of the most difficult period in its history, and I feel I’ve accomplished that.”
Obama lauded her record, noting in a statement that Schapiro “was fully aware of the difficulties facing the SEC and our economy as a whole. But she accepted the challenge, and today, the SEC is stronger and our financial system is safer and better able to serve the American people — thanks in large part to Mary’s hard work.”
Even one of the SEC’s most strident critics credited Schapiro for turning around the agency. Harry Markopolos, the financial sleuth who had tried for years to alert the SEC to Madoff’s Ponzi scheme, said he initially opposed her nomination because she once ran the brokerage industry’s self-regulatory body and he took her for an industry sympathizer.
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