Obama taps securities regulator Schapiro for SEC, 2 others
— -- Rounding out his economic team, President-elect Barack Obama on Thursday named three veteran regulators to deal with the turmoil in the nation's financial markets and the economy.
Obama said he will nominate Mary Schapiro to chair the Securities and Exchange Commission, Gary Gensler to head the Commodity Futures Trading Commission and Daniel Tarullo to fill an empty Federal Reserve seat. All three will need to be confirmed by the Senate next year.
In announcing the appointments, Obama mentioned Wall Street money manager Bernard Madoff, saying the latest investment scandal "has reminded us yet again of how badly reform is needed." The president-elect said his team will help put in place new rules that will help "crack down on the culture of greed and scheming."
Obama introduced his latest selections at a news conference in Chicago. It's his fourth this week as he seeks to fill many, if not all, key positions before heading to Hawaii for a holiday vacation.
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.
Tarullo, 57, is one of Obama's economic policy advisers and was President Bill Clinton's top adviser on international economic policy.
The Federal Reserve Board has two vacancies on its seven-member panel. Tarullo, who must be confirmed by the Senate, would join Chairman Ben Bernanke as the Fed tries to ease a credit crisis and combat a deepening recession.
Gensler was a former Treasury official in the Clinton administration He also worked on Capitol Hill as a senior advisory to former Democratic Sen. Paul Sarbanes of Maryland. Sarbanes authored legislation to increase oversight of the accounting industry and reform corporate governance.
The Commodity Futures Trading Commission is an independent agency created by Congress to regulate trading in the commodity futures and option markets.
The selection of Schapiro 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.
"Mary understands there's a premium for the U.S. market because of our transparency," he says. Her appointment "really takes us back to a very good place."
Obama intends to nominate Republican Rep. Ray LaHood of Illinois as transportation secretary, Democratic officials told the Associated Press on condition of anonymity because the appointments have not been officially announced.
Other appointments still outstanding are secretary of Labor, the top intelligence position and the office of U.S. Trade Representative, and Surgeon General.