New head at SEC: What does it mean?

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Shapiro

Mary Schapiro, the head of the Securities and Exchange Commission, announced Monday she was leaving her post ending a long career in regulation and what many news outlets dubbed a tumultuous four years for the agency.

Here’s a bit from the Wall Street Journal story:

A career regulator, Ms. Schapiro is credited by current and former SEC officials with steadying the agency after its failure to spot the Bernard Madoff fraud, among others. Her experience in top regulatory roles helped to repair the SEC’s battered image, protect its powers during a big rewrite of financial regulation and boost employee morale.

At the same time, one of her top priorities, tightened rules for the $2.6 trillion money-market mutual-fund industry, collapsed this past summer when she failed to win over a majority of the five-member commission. The SEC has also made little progress in grappling with one of its most significant challenges: reining in an explosion of computerized trading that has sparked a series of high-profile market breakdowns, triggering a crisis of confidence among mom-and-pop investors—the kind Ms. Schapiro pledged on taking the job to protect.

Elisse Walter, a Democratic commissioner, will act as chairman when Ms. Schapiro formally leaves her post Dec. 14. Ms. Schapiro, 57, had more than a year on her term left to run. According to an administration official, the White House intends to nominate a permanent successor before Ms. Walter’s tenure as commissioner expires at the end of next year.

The Washington Post had some measured praise for Schapiro (this skips a bit, so read the full story):

The agency’s resources were strained as it struggled to craft many of the regulations tied to the sweeping Dodd-Frank financial overhaul measure, some of which the industry challenged in court with some success. The agency revamped its many divisions — including the enforcement staff, which brought a record number of enforcements, including 735 in 2011 and only one less in fiscal 2012. At each step, Schapiro got hauled to testify before Congress about the agency’s progress or lack thereof. She testified 45 times.

Schapiro came to the job with a long list of inside-Washington credentials. She had served as an SEC commissioner from 1988 to 1994, originally appointed by President Ronald Reagan and then reappointed by President George H.W. Bush. President Bill Clinton named her acting SEC chairman in 1993, but she left the agency when Clinton nominated her as chairman of the Commodity Futures Trading Commission, where she served until 1996.

In a statement Monday, Obama said: “When Mary agreed to serve nearly four years ago, she was fully aware of the difficulties facing the SEC and our economy as a whole. But she accepted the challenge, and today, the SEC is stronger and our financial system is safer and better able to serve the American people — thanks in large part to Mary’s hard work.”

Some of Schapiro’s critics say she was not forceful enough in holding Wall Street accountable, citing the agency’s failure to pursue top Wall Street executives closely tied to the financial meltdown. But Schapiro told The Washington Post last week that she has managed to steer the agency through its most difficult period in history.

Today, she notes, no one is talking of abolishing the SEC.

The Huffington Post’s Mark Gongloff completely disagreed, saying the best she did was keep the agency from becoming “entirely useless.” He lists her “hits” as saving the SEC, and handling insider trading. Her “misses,” he wrote, are longer and include slow rule-making, not charging high ranking Wall Streeters for their crimes, and low fines.

And shockingly, the New York Times was the outlet that put together the strongest defense of Schapiro’s tenure at the agency. Here’s an excerpt:

As her bruising tenure comes to an end, Ms. Schapiro, who stepped down on Monday, leaves behind a stronger S.E.C., an overhaul characterized by her attention to detail and meticulous preparation.

While the agency still faces its share of challenges, Ms. Schapiro, the first woman to hold the top spot full time, has revamped the management ranks, revived the enforcement unit and secured more funding from a budget-conscious Congress.

A self-described pragmatist, she has also won over critics and embraced a cautious style that made her a steady hand during periods of tumult, like the May 2010 stock market flash crash.

Still, the makeover is not complete.

The agency must now grapple with the increasingly complex products and rapid-fire trading that dominate Wall Street. Ms. Schapiro’s conservative nature has also drawn fire from consumer advocates, who were hoping for a louder voice more critical of the financial industry. She was slow, they argue, to combat a new law that loosened investor protections and has trailed other regulators in writing rules for Wall Street.

I guess the rule writing will just have to continue under the new head. While her legacy is mixed, the media coverage taken together creates a fairly clear picture of her accomplishments and shortcomings.