Obama Picks FINRA Head Mary Schapiro to Lead SEC

The former SEC commissioner and one-time acting chairman has a reputation as a smart and tough regulator, the president-elect says.

At the SEC itself, she’ll have to seek new sources of input as top staff positions empty out during Cox’s last weeks in office. Such turnover between administrations is normal, of course, but recent resignations have included key players like John White, director of Corporation Finance, and chief accountant Conrad Hewitt. Schapiro will also have to decide whether to fight for the SEC’s current structure or go along with ideas to merge it with another agency. Earlier this year, Henry Paulson suggested the SEC’s regulatory authority should fall under the CFTC.

“She has a good grasp of the regulatory structure,” Martin tells CFO.com. “Not many people are more qualified to help in the process or even lead the process of rehabilitating the regulatory structure.”

Another SEC alum sung Schapiro’s praises. Former SEC commissioner and current Cooley Godward Kronish partner Roel Campos tells CFO.com, “she’s probably the most experienced regulator, certainly in any developed country in her time period.”

On the other hand, some critics may suggest that her greatest weakness could be her past leadership positions in the very regulatory agencies so badly in need of reform. Still, Broc Romanek, editor for TheCorporateCounsel.net and a former counsel for the SEC’s corporate finance division, tells CFO.com, “she is on record championing greater oversight of swaps and derivatives, and [the need for] other market fixes that are bound to occur.”

In addition to pressing regulatory reform, Schapiro will have to deal with Cox’s pet projects, which he has pushed through for approval in recent weeks. These include a timeline for all U.S. publicly traded companies to use global accounting standards and a mandate for companies to data-tag their financial statements. She may also address other issues that Cox dropped, such as giving shareholders input on director nominations, Jim Cox, a law professor at Duke University, tells CFO.com.

In a statement, Christopher Cox commended Obama’s choice of Schapiro, calling her a “consummate professional.” He added, “she is deeply committed to protecting investors and ensuring the integrity of our markets.”

Schapiro said during Obama’s press conference that her entire career has focused on investor protection. She considers the role of the SEC — of which she served as commissioner for six years and acting chairman for two months — role “critical to the future economic health of our economy.”

One peculiar connection to the Madoff scandal, not addressed at the press conference, is Schapiro’s reported 2001 appointment of Mark Madoff, son of accused investment swindler Bernard Madoff, to the board of the National Adjudicatory Council, which reviewed initial decisions before certain actions of FINRA’s forerunner, and continues to be involved in such FINRA processes now.


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