At 63, Walter is retiring from government service and leaving behind the agency where she has spent the bulk of her public-
sector career, arriving there just three years out of law school in 1977.
In this edited transcript, Walter reflects on her time at the SEC, which has evolved from an arcane government entity that was largely unnoticed by the general public to a closely watched regulator that was widely maligned for failing to keep an eye on Wall Street leading up to the 2008 financial crisis or detect the Bernard L. Madoff Ponzi scheme.
What did it take to land the position of SEC commissioner?
I started thinking about the job in the mid- to late ’80s. I wanted to be one of the ultimate decision makers. I never thought it was a realistic possibility. But in the early 2000s, I thought I should try to do this. I called everyone I knew, either because they occupied the position or because they knew something about how Capitol Hill works. The recommendations for commissioner slots mostly originate from Capitol Hill, and the president does the nominating. But I didn’t get the job.
Six years later, when you were working at the Financial Industry Regulatory Authority (FINRA), you finally got nominated as an SEC commissioner. How did that happen?
Sen. Jack Reed called [FINRA’s then-chief executive] Mary Schapiro. A Democratic seat on the commission had opened up and he asked Mary for a recommendation. She gave him my name. You need a rabbi to get you through the process. When the right people are willing to sign on and support you, it just happens. I remember early on in my tenure, a group of business-school students asked me: “How do you become a commissioner?” I think the answer is serendipity. There isn’t a career path.
After you were sworn in as a commissioner July 9, 2008, you were diagnosed with cancer. Did you consider leaving?
Had I known I was sick before I got the job, I would have pulled my name. I got my diagnosis, ovarian cancer, in August. It was a big shock. But as a prior breast cancer survivor, I was probably better prepared than most. I knew I could persevere without falling apart. I told [then-SEC Chairman] Chris Cox that I needed surgery and that I was going to be out for a while. He was wonderful. I told the other commissioners. I told my brand-new staff. None of them knew me that well, so those poor people had to deal with an absentee boss and with juggling a lot of pressure internally.
By then, the financial crisis was unfolding and you were bedridden. How did you juggle it all?
With my BlackBerry and my cellphone and my regular phone and my laptop, I had the ultimate home office. That was psychologically very important to me. I had to look forward. It was very important to be engaged. My staff, as new as they were, was so smart and dedicated. They supported me so well.
The SEC continues to get beaten up over the financial crisis. Does it deserve the criticism?
Some of the things we were blamed for we deserved. Most of them we did not. When you see the thousands of people who work hard here get accused of being stupid or even corrupt, it makes you angry. Two things were forgotten in all of this. One is that the markets continued to work during the financial crisis. That’s a tribute to the exchanges and the commission, which oversees the exchanges. The second is that customer accounts were not at risk at the brokerages. Their holdings went down, but they did not lose money by virtue of the way the brokerages were run or the way they were overseen by the SEC.
You served as SEC chairman for about four months after Mary Schapiro’s departure in December. Was it tough to leave the top slot?
My dream was to be a commissioner; it was never to be the chairman — too stressful. I told the White House I was not interested in staying on long, but I didn’t know how long they’d need me. Once I became chairman, I loved it. It was hard to give it up. Every day you do it, you develop plans for two more days down the road.
What has it been like working with the new chairman, Mary Jo White?
The first thing people think about is her prosecutorial expertise and her litigation skills, and she certainly has that nailed down. But she also brings a pragmatic perspective because of her litigation background, which is extremely helpful. She deserves the highest accolades for being a pragmatic idealist. She heads in the right direction, and she figures out a way to get there. I like to think all women chairs in the SEC are like this.
What is the working environment for a woman at the SEC?
When I went to Harvard Law School in 1974, the ratio of men to women was 11 to 1. I went to work at a law firm, and when I left three years later, I was the most senior woman at the firm. There had been women partners, but they would leave.
The sense I had when I got to the SEC in 1977 is that it was easier to be a woman here — there was more of a senior-women presence. One of the women I admired most told me she never felt bad walking out of a meeting to attend to her son’s doctor’s appointment, for instance. She would just say she had a conflict. I wanted to advance that one more step. I just said: I am taking my son to the doctor. You always have to feel a sense of responsibility to the women who are following you.