Mary Schapiro Stepping Down After Leading SEC in Crisis

Mary SchapiroBy MARCY GORDON, AP Business Writer

WASHINGTON (AP) - Mary Schapiro will step down as chairman of the Securities and Exchange Commission next month after a tumultuous tenure in which she helped lead the U.S. government's regulatory response to the 2008 financial crisis.

President Barack Obama designated Elisse Walter, an SEC commissioner, to replace Schapiro.

Schapiro will leave Dec. 14, the SEC said Monday. She was appointed by Obama in the midst of the worst financial crisis since the Great Depression. She took over after the agency failed to detect the Bernard Madoff Ponzi scheme.

Schapiro is credited with helping reshape the SEC after it was accused of failing to detect reckless investments by many of Wall Street's largest financial institutions before the crisis. And she led an agency that brought civil charges against the nation's largest banks.

But critics argued that she failed to act aggressively to charge leading individuals at those banks who may have contributed to the crisis. Consumer advocates questioned Schapiro's appointment because she had led the securities industry's self-policing organization, the Financial Industry Regulatory Authority.

Under Schapiro, the SEC reached its largest settlement ever with a financial institution. Goldman Sachs & Co. agreed in July 2010 to pay $550 million to settle civil fraud charges that it misled investors about mortgage securities before the housing market collapsed in 2007. Similar settlements followed with Citigroup Inc., JPMorgan Chase & Co. and others.

The Goldman case came to symbolize a lingering critique of Schapiro's tenure: No senior executives were singled out. The penalty amounted to roughly two weeks of earnings at Goldman. And Goldman was allowed to settle the charges without admitting or denying any wrongdoing, as were other large banks that faced similar charges.

Among the leading critics was U.S. District Judge Jed Rakoff, who questioned how the SEC could allow an institution to settle serious securities fraud without any admission or denial of guilt. Rakoff later threw out a $285 million deal with Citigroup because of that aspect of the deal.

Lawmakers and experts say Schapiro made the SEC more efficient, and they note that she fought for increased funding needed to enforce new rules enacted after the crisis. She often clashed with Republican lawmakers who had opposed the 2010 financial overhaul law and wanted to cut the SEC's budget.

"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," Obama said in a statement Monday. "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."

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Artie

I don't envy anyone having to take on this toothless job. None of the banksters and Wall Street wise guys went to prison for essentially causing the biggest economic collapse since the Great Depression. We're still dealing with the aftermath. When you put the wolves in charge of the hen house the end result is financial smoke and mirrors, a bursting bubble economy and pure economic BS. The crooks, banksters and the politicians in Wall Streets pockets still pull the strings and run this corrupted and rigged casino. It's business as usual. And, F the GOP when it comes to non-regulation of these skeevosas.

November 27 2012 at 11:52 PM Report abuse +1 rate up rate down Reply
dembaitnswitch

I guess Schapiro got sick of the corruption going on there [ those bribes are hard to turn down ] just maybe she has a conscience, unlike the rest that are involved in the shenannigans between capitol hill and wall street.

November 27 2012 at 8:56 AM Report abuse rate up rate down Reply
croone22

One incompetent +one incompetent=2 incompetents+Obama =3 incompetents=CRASH

November 26 2012 at 11:56 PM Report abuse +1 rate up rate down Reply
1 reply to croone22's comment
MeOff

Who cares if Obama is incompetent, so was Bush but we survived! And at least it's better than the alternative - a Wolf in the HenHouse!

November 28 2012 at 9:34 AM Report abuse rate up rate down Reply
joey

HAHAAHA Leader.......

November 26 2012 at 5:11 PM Report abuse +1 rate up rate down Reply
OhReally

Just another Obama political hack leaving the sinking ship.

November 26 2012 at 3:22 PM Report abuse +3 rate up rate down Reply
jlaba2

The SEC was and still is a "rubber stamp" for Wall Street. They don't do the job they are supposed to do.

November 26 2012 at 2:18 PM Report abuse +1 rate up rate down Reply
1 reply to jlaba2's comment
coochiescooter

Those morons over there are too busy downloading porn.

November 26 2012 at 2:24 PM Report abuse +2 rate up rate down Reply
coochiescooter

I'd like to see Judge Judith Scheindlin head of the SEC

November 26 2012 at 2:14 PM Report abuse +2 rate up rate down Reply
Somey

I would like to see Eliot Spitzer head the SEC.

November 26 2012 at 2:08 PM Report abuse -6 rate up rate down Reply
1 reply to Somey's comment
freethedems2012

You'd like to see Madoff free to take over wouldn't you?

November 26 2012 at 4:45 PM Report abuse +2 rate up rate down Reply
Phil Smith

SEC sleeps with Wall Street firms.

November 26 2012 at 2:08 PM Report abuse +4 rate up rate down Reply
mike edwards

we keep going backwards no forward motion on antthing in 4 years am i that ignorant just show the american people some daylight

November 26 2012 at 1:52 PM Report abuse +2 rate up rate down Reply
1 reply to mike edwards's comment
MeOff

We have to go backwards to get back to the point that we can be productive again! Thats what happens when you REALLY fall off the "cliff" like we did in 2008! Can't just snap your fingers and "poof - fix it"!

November 28 2012 at 9:37 AM Report abuse rate up rate down Reply