Will Mary Schapiro Be An Investor-Advocate At the SEC?

by Jacob Zamansky on December 18th, 2008 at 11:27 am : Comments 000

Late into the news cycle last night, two Democratic officials confirmed that Mary Schapiro will be named chairperson of the SEC.  Ms. Schapiro currently serves as chief executive of the Financial Industry Regulatory Authority (FINRA), a self-regulatory entity created when both the New York Stock Exchange (NYSE) and National Associated of Securities Dealers (NASD) combined their oversight responsibilities.  She is the first person to hold the position since the creation of FINRA.

I am optimistic that Ms. Schapiro will use her new position, assuming she is confirmed, to revitalize the SEC.  She has both enforcement chops as well as experience rebuilding an outdated regulatory regime having created FINRA basically from scratch.  While I am no fan of Wall Street’s obsession with self-regulation, Ms. Schapiro has done a commendable job given the circumstances.

It is concerning that while she was in her position Bernie Madoff was able to allegedly perpetrate his Ponzi scheme and enforcement actions have slid, and I expect this to be a major issue during her confirmation hearing.  But I believe Ms. Schapiro’s experience will eventually temper those concerns.

Perhaps most importantly, Ms. Schapiro’s nomination breaks a destructive line of SEC leaders with close financial ties to the securities industry.  She has served as a regulator nearly her entire career.  She will also have the winds of reform at her back allowing her to more easily institute massive changes at the SEC.

For these reasons, Mary Schapiro is a good choice to oversee the SEC.

Filed under Investment Fraud, SEC, Securities Arbitration, Wall Street
and FINRA, Mary Schapiro, Regulation, SEC