Financial Industry Lawyers Praise Schapiro for Saving a Tattered SEC
The National Law Journal
Mary Schapiro, the chairwoman of the U.S. Securities and Exchange Commission, has announced that she will be stepping down from her post and leaving the agency on December 14.
Schapiro, who took on the role in January 2009, piloted the agency through the financial crisis and the Bernie Madoff prosecution.
Schapiro, who announced her departure November 26, reshaped the SEC during her tenure, and according to some metrics, revitalized it. During the 2011 fiscal year, for example, the agency brought an all-time high 735 enforcement actions and collected $2.8 billion in penalties. The agency also created a whistleblower program which in August paid out its first reward.
But Schapiro was criticized for not acting more forcefully to repair an agency with a reputation that had been pummeled because of its response to the financial meltdown, and the notion that it had dismissed clear evidence of Madoff's crimes. She was scolded for not doing more to hold top Wall Street executives accountable for the crisis, and was called to testify on Capitol Hill about the agency's progress almost four-dozen times during her tenure.
Law firm partners who handle SEC defense work largely praised Schapiro.
"I think she gave it her all," McDermott Will & Emery partner Eugene Goldman said in an interview. "Under the most difficult circumstances, Congress imposed burdensome mandates on the agency to carry out Dodd-Frank."
Goldman, formerly senior counsel in the SEC¹s Division of Enforcement, said that Schapiro hired top-notch staff to fill out the whistleblower office. He said that because of the time lag between tips and enforcement actions, 2013 will provide proof of the success of the initiative. "The statistics indicate that there has been significant response to the program through a large number of tips and complaints filed with the agency," he said.
Thomas Sporkin, a BuckleySandler partner in Washington and former head of the SEC's office of market intelligence, said in an interview that when Schapiro took her post that the agency was on the verge of obsolescence.
"I think she did a fantastic job saving the agency," he said.
Sporkin spoke highly of Schapiro's re-organization efforts and renewed focus on enforcement. But despite her accomplishments, he said Schapiro was bogged down by her proposal to reform the structure of money market funds.
"Mary Schapiro has demonstrated extraordinary leadership, dedication and fortitude in the most challenging economic and regulatory environment in modern history," Gibson Dunn partner F. Joseph Warin said in a written statement. "She is the uber-model of a public servant‹visionary, selfless and always protective of investors' interests and transparent markets."
President Barack Obama plans to appoint current SEC Commissioner Elisse Walter as chairwoman upon Schapiro's departure, according to a release from the White House. Before joining the agency, Walter, a George W. Bush appointee, served as senior executive vice president for regulatory policy and programs with the Financial Industry Regulatory Authority.
Media reports conflicted Monday over whether Walter was chosen as a full-term or interim replacement for Schapiro. White House spokesman Eric Schultz passed questions to spokeswoman Amy Brundage, who could not be immediately reached.
If Walter is a temporary choice and Obama still needs to nominate a full-term replacement pick for Schapiro, several names have been floated.
According to a recent National Law Journal report, in addition to Walter, they include Mary John Miller, the undersecretary for domestic finance at the Treasury Department; FINRA chief executive officer Richard Ketchum; Columbia Law School professor Harvey Goldschmid (a former SEC commissioner and general counsel); and former Bank of America executive Sallie Krawcheck.
Schapiro was previously commissioner of the SEC from 1988 to 1994. She was appointed chair of the Commodity Futures Trading Commission by President Bill Clinton and served in that post until 1996. She has not said what she'll be doing next.
Schapiro did not respond to a request for comment. In a written statement, she said, "It has been an incredibly rewarding experience to work with so many dedicated SEC staff who strive every day to protect investors and ensure our markets operate with integrity. Over the past four years we have brought a record number of enforcement actions, engaged in one of the busiest rulemaking periods, and gained greater authority from Congress to better fulfill our mission."
"I want to express my deep gratitude to Mary Schapiro for her steadfast leadership at the Securities and Exchange Commission," Obama said in a written statement. "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."
This article originally appeared in The National Law Journal.