Sources: Obama taps securities regulator Schapiro to lead SEC
— -- President-elect Barack Obama has selected longtime securities regulator Mary Schapiro to head the Securities and Exchange Commission, according to two Democratic officials with direct knowledge who did not want to be named because the announcement had not been made. It was expected Thursday.
Schapiro has long served in a variety of regulatory roles, including as SEC commissioner for six years after being appointed by President Reagan in 1988, reappointed by President Bush in 1989 and named acting chairman by President Clinton in 1993.
She is currently head of the non-governmental body that supervises the security industry, called Financial Industry Regulatory Authority, or FINRA.
The selection comes at a precarious time for the SEC. Current Chairman Christopher Cox Tuesday said he is "gravely concerned" at how the agency missed multiple red flags into the alleged $50 billion Ponzi scheme by money manager Bernard Madoff.
"She could add an innovative perspective," says Jack Ablin of Harris Private Bank. The SEC needs a shot of credibility after failing to alert investors to a series of alleged frauds, he says. The SEC "has been giving a false sense of security to investors."
Schapiro cemented her reputation heading the Commodity Futures Trading Commission from 1994 to 1996. Her efforts made the CFTC's method of regulation one of the best in the industry, Ablin says, "and a model for financial regulation in the future." The CFTC regulates the nation's futures markets, where a variety of financial instruments, including those tied to agricultural and energy products, trade.
Her career at FINRA began in 1996 as the president of NASD Regulation, which was later combined with the New York Stock Exchange's regulatory arm to create FINRA under Schapiro's guidance.
Having a SEC commissioner with such a long résumé and deep experience is critical as the nation rewrites the rules on how to regulate its financial system, says Michael Farr of Farr Miller & Washington.
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