Schapiro, Head of S.E.C., Announces Departure


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Schapiro, Head of S.E.C., Announces Departure

Published: Monday, 26 Nov 2012 | 10:57 AM ET
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By: Susanne Craig and Ben Protess
The New York Times

Mary L. Schapiro, who overhauled the Securities and Exchange Commission after the financial crisis, announced Monday that she is stepping down as chairwoman of the agency.

In recent days, the S.E.C. informed the White House and Treasury Department that Ms. Schapiro planned to leave next month, becoming the first major departure from the Obama administration’s team of financial regulators. Ms. Schapiro will also relinquish her position as one of the five members of the agency’s commission, the group that oversees Wall Street and the broader financial markets.

The move, which follows a bruising, four-year tenure, was widely telegraphed. Ms. Schapiro, 57, has confided in staff members for more than a year that she was exhausted and hoped to leave after the November elections.

In 2008, President Obama nominated Ms. Schapiro, a political independent, to head the S.E.C. at a time when extreme economic turmoil had shaken investor confidence in the country’s securities regulators.

The agency was faulted for its lax oversight of brokerage firms like Lehman Brothers, which failed in 2008 and contributed to the worst economic downturn since the Great Depression. Just weeks before Ms. Schapiro started as chairwoman, the Wall Street investor Bernard L. Madoff was accused of running a large Ponzi scheme, further damaging the credibility of regulators like the S.E.C., which missed crucial warning signs about the fraud.

Ms. Schapiro, a lifelong regulator who previously ran the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority, quickly gained a reputation as a consensus builder determined to repair the agency’s reputation. A tireless preparer and self-described pragmatist, Ms. Schapiro overhauled the agency’s management ranks, revived the enforcement unit and secured more money and technology at a time when other agencies were being asked to cut back.

“The S.E.C. came back from the brink,” said Harvey L. Pitt, a former chairman of the agency under President George W. Bush. “I give her enormous credit for that.”

Consumer advocates and other critics, however, say she failed to grab the bully pulpit at a time the country needed a vocal critic of Wall Street. Since the financial crisis, the agency brought few enforcement cases against the Wall Street executives at the center of the crisis.

The S.E.C. notes it has brought a record number of cases over the last two years. While no top banking executives have been charged, the agency has filed actions against 129 people and firms tied to the crisis.

There is no clear successor to Ms. Schapiro. Mary J. Miller, a senior Treasury Department official, is under consideration for the job, a person briefed on the matter said. Sallie L. Krawcheck, a former top executive at Citigroup and Bank of America, is also in the running, according to people with knowledge of the matter.

The agency’s enforcement chief, Robert Khuzami, is a long-shot contender. Elisse B. Walter, a commissioner at the S.E.C., may step in to serve as interim chairwoman until a new one is confirmed.

As for Ms. Schapiro, few expect her to follow her predecessors and move into private legal practice, where she would defend the banks she has spent years regulating. Instead, they say she is more likely to seek out a position at a university or research group.
This story originally appeared in The New York Times

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Let me guess... she's leaving to spend more time with her family.