SEC Chairman Mary Schapiro is Stepping Down

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President Obama names SEC Commissioner Elisse Walter to assume role of Chairman.

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Mary L. Schapiro, the Chairman of the U.S. Securities and Exchange Commission (SEC), has announced that she will resign from her position after almost four years at the agency’s helm. President Obama quickly selected Elisse Walter, one of the five current SEC Commissioners, as Schapiro’s replacement as the next Chairman.

Schapiro, who began her tenure as SEC Chairman in the wake of the financial crisis in 2009, oversaw one of the most tumultuous and active periods in the agency’s history.  At the beginning of Schapiro’s tenure, the SEC faced sharp criticism over its failure to prevent, or at least warn about, the worst financial crisis since the Great Depression. In particular, critics hammered the agency for maintaining a lax regulatory structure that allowed both Bernie Madoff’s Ponzi scheme and the Lehman Brothers bankruptcy to occur.

Under Schapiro, however, the SEC redoubled enforcement efforts, bringing 1,468 enforcement actions in the last two years, the highest two-year count in the agency’s history. Also, with the passage of the Dodd-Frank Act, the SEC undertook what the agency has characterized as one of its “busiest rulemaking periods in decades” – albeit one that still had critics pointing out that the agency failed to meet more than half of statutory deadlines for rulemaking.

Although Schapiro has been praised for rescuing the agency from the point of irrelevance, her term has not been free of controversy. Despite bringing headlineseizing enforcement actions, the SEC’s enforcement division has still been criticized as being soft on Wall Street. In addition, many of the SEC’s regulations enacted under Dodd-Frank have proven controversial, and some were successfully challenged in court.

President Obama expressed his “deep gratitude” to Schapiro, stating, “the SEC is stronger and our financial system is safer and better able to serve the American people – thanks in large part to [Schapiro’s] hard work.” He also expressed confidence in Walter, a former senior executive vice president at the Financial Industry Regulatory Authority (FINRA) and one of the SEC’s two Democratic Commissioners.

President Ronald Reagan appointed Schapiro, a political independent, to be an SEC Commissioner in 1988, a position she continued to fill until being named Acting Chairman by President Bill Clinton in 1993. President Clinton later appointed her as chairman of the Commodity Futures Trading Commission (CFTC) in 1996, making her the only individual ever to head both the CFTC and the SEC.

As Walter will move from her current position as a Commissioner to become the new SEC Chairman, there will still remain a vacancy on the Commission. President Obama will need to nominate a replacement Commissioner and seek Senate confirmation of his choice.