Additional Obama Appointments
Mary Schapiro - Chair, Securities and Exchange Commission
Former Chair, CEO, Financial Industry Regulatory Authority
Former member, President's Advisory Council on Financial Literacy, Bush administration
Former Chair, Commodity Futures Trading Comission, Clinton administration
Former board member, Duke Energy
Former board member, Kraft Foods
Nominated: December 18, 2008
Obama’s comments:
“Mary Schapiro currently serves as the Chief Executive Officer of the Financial Industry Regulatory Authority, the largest regulator for all securities firms that do business with the United States. Before that, she served as an SEC commissioner, and as Chairman of the Commodity Futures Trading Commission.
“Mary is known as a regulator who’s both smart and tough—so much so that she’s been criticized by the same industry insiders who we need to get tough on. For years, she’s used her position to educate investors about market risks, warn seniors and employers about retirement scams, and call for increased regulation of mortgage brokers long before this housing crisis hit. I know that Mary will provide the new ideas, new reforms, and new spirit of accountability that the SEC desperately needs so that fraud like the Madoff scandal doesn’t happen again.”
Others’ comments:
“Schapiro’s selection to head the SEC and its staff of more than 3,600 is another example of Obama opting for experienced hands who served under the last Democratic president, Bill Clinton.
“She served in the mid-1990s as chairwoman of the CFTC, the agency that oversees market trading of oil, corn and other commodities.
“Schapiro, who was appointed by former Republican president Ronald Reagan as an SEC commissioner, serving for six years, now heads the Financial Industry Regulatory Authority, a self-regulating agency for Wall Street.
“‘There was a very short list of candidates for SEC who could save the agency from extinction and Mary Schapiro was on that short list,’ said Jacob Frenkel, a securities lawyer who worked with Schapiro as senior counsel in the SEC’s enforcement division.
“‘She was always regarded as a very thoughtful, level-headed and enforcement-oriented regulator,’ he said.
“‘She surrounded herself with very strong people in her prior tenure with the commission. Hopefully she’ll bring some of them back.’”
—Agence France-Presse
“The 53-year-old head of the Financial Industry Regulatory Authority (FISD)…earned a reputation for political independence during almost three decades in public service, David Martin, co-head of the corporate and securities practice at Washington-based Covington & Burling, said in an interview.
“‘You don’t survive in Washington for that many years by being colorful,’ he said. ‘She is quite independent. She doesn’t bring much of any agenda other than sensible regulation.’
“‘If regulators were asleep at the switch, why are we recycling regulators?’ said [a former] general counsel of hedge fund Long-Term Capital Management LP. A group of banks rescued LTCM with a $3.6 billion bailout in 1998.
“The native New Yorker was appointed an SEC commissioner by President Ronald Reagan in 1988 and would become the first woman to be the permanent chairman of Wall Street’s federal regulator if confirmed by the Senate. She served as acting chairman from 1993 to 1994.
“Former President Bill Clinton tapped Schapiro to lead the CFTC, the Washington-based agency that regulates daily trades in commodities such as orange juice and foreign currencies, in 1994.
“Two years later she became head of the National Association of Securities Dealers Regulation Inc. [NASD, now the FISD]. Schapiro won a $12 million settlement from First Command Financial Planning Inc. in 2004 over allegations it used misleading materials to sell improper mutual fund investments to military personnel.
“She faced one of her stiffest challenges in 2006 trying to convince brokerage firms to approve a merger of the NASD with the New York Stock Exchange’s regulatory unit to create Finra. The Washington-based agency, which is overseen by the SEC, inspects more than 5,000 U.S. brokerages, writes rules for those selling securities and imposes sanctions.
“She crisscrossed the nation holding town hall meetings with securities dealers, many of whom thought the union would benefit companies such as Merrill Lynch and Morgan Stanley to the detriment of small brokerages. In January 2007, NASD members voted 64 percent in favor of approving bylaw changes needed to combine the industry’s two self-regulators, a merger completed seven months later.
—Bloomberg News
Approved: January 22, 2009
Appointment Impact:
“Schapiro will take over an agency that failed this year to detect Madoff’s alleged Ponzi scheme and prevent the collapse of investment banks Bear Stearns Cos. and Lehman Brothers Holdings Inc.
“The conversion of Goldman Sachs Group Inc. and Morgan Stanley into bank-holding companies and the takeover of Merrill Lynch & Co. by Bank of America Corp. mean that Schapiro will share financial regulation of Wall Street with Federal Reserve Chairman Ben S. Bernanke and Timothy Geithner, Obama’s… Treasury Secretary.
“Schapiro (has) endorsed a ‘twin peaks’ approach to oversight. Such a system includes two regulators: one to focus on potential shocks to the financial system, such as the failure of a massive bank, and one to enforce compliance with rules.
“She also said the Fed should be given broader authority to oversee entities such as hedge funds, which remain outside federal regulation.
“Schapiro ‘will get it done. She knows whose heads need to roll,’ said Harvey Pitt, who led the SEC from 2001 until early 2003.”
—Bloomberg News
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