Mary Schapiro’s nomination to lead the U.S. Securities and Exchange Commission comes amid one of the most chaotic and tumultuous periods in its 75-year history, according to The Financial Times.
The SEC has been widely criticized for its failure to curtail the downfall of the economy. The latest incident of failed oversight involves the $50 billion “Ponzi” scheme allegedly perpetrated by Bernard Madoff—despite repeated red flags throughout his years of operation.
Schapiro is currently CEO of the Financial Industry Regulatory Authority, the securities industry’s regulatory body. She faces her Senate hearing tomorrow.
“She will face some tough questions . . . about Bernie Madoff,” said Joe Borg, director of the Alabama Securities Commission, but overall “she might be the right candidate at this time on most of the issues”.
Schapiro’s methods of dealing with previous problems has raised concerns. David Tittsworth, the director of the Investment Advisor Association, said: “The single biggest concern that we have [about her] is that when she was at Finra she was in favour of a self-regulated regime for investment advisers . . . We oppose that.”
However, many say that her experience would be invaluable if there were a merer of the SEC and the CFTC. Schapiro rebuilt the NASD in 1996 after a price-fixing scandal. She rebuilt it into a strong watchdog and enforcer and then became a driving force behind merging the regulatory functions of the NASD and the New York Stock Exchange. Last year they combined to form Finra.
“She has a lot of credibility . . . and she is a good person at this time to bridge the gap between where we are now and where we need to go [in regulation]“, said Gary DeWaal, general counsel of Newedge, a global brokerage firm.