Chairman Schapiro to Leave SEC
November 26, 2012
Securities and Exchange Commission chairman Mary L. Schapiro said she will leave her office before the end of the year.
Schapiro, who was nominated to her post on the first day of the Obama Administration in January 2009, said she will step down on Dec. 14.
She leaves a wide range of reforms to capital markets, initiated during her term as chairman, unfinished.
Of 95 rules that the SEC is charged with defining and enacting from the 2010 Dodd-Frank Wall Street Reform Act, only 32 have been finalized, for instance, according to a progress report put out monthly by the securities law firm of Davis Polk Wardwell.
In August, Schapiro yanked a series of proposals for additional reform of the market for money market mutual funds, when she saw she didn’t have the votes to enact a new round of capital buffers or other changes. The industry staged a fierce campaign, in particular, to ward off any attempt to let the daily value of a share in such funds deviate from $1.
Her proposal that the securities trading industry create a “consolidated audit trail” of all quotes and orders on stock and options markets is also unfinished. That was a response to the May 6, 2010 Flash Crash, where stocks lost hundreds of points of value in a matter of minutes, then sprang back. The system for spotting and analyzing market disruptions and abuses is on track to be completed in 2013 or 2014 after she has left office.
“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,” Schapiro said, in a statement. “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.”
During her tenure, Schapiro did eliminate stub quotes, to make sure prices of valuable stocks could not fall to a penny, as occurred during the Flash Crash; put in place new single-stock and market-wide “circuit breakers,’’ to prevent a recurrence; ended ‘naked’ access to stock markets, requiring all electronic trades from sponsored participants to pass through brokers’ risk controls; established a “whistleblower program,’’ to try and head off recurrences of fiascos such as the multibillion-dollar false trading scheme of investing fraud Bernard L. Madoff; established a new division to focus on risk analysis; and stepped up enforcement activity and results. In the last fiscal year, the agency brought a record 735 actions and returned more than $6 billion to investors harmed.