Mary Schapiro, chairman of the Securities Exchange Commission.(Photo: Mark Lennihan, AP)
President Obama on Monday tapped
Elisse Walter to replace Mary Schapiro, who is stepping down as
chairwoman of the Securities and Exchange Commission.
House said Walter, a current commissioner, will lead the agency when
Schapiro leaves next month. A Democrat, Walter came to the SEC after
President George W. Bush appointed her in July of 2008. Before then, she
worked at the Financial Industry Regulatory Authority, which Schapiro
led before she moved on to the SEC.
Walter can serve through 2013 without Senate approval because she's already been confirmed to the commission.
confident that Elisse's years of experience will serve her well in her
new position, and I'm grateful she has agreed to help lead the agency,"
Schapiro, the first woman to serve as the agency's
permanent chairman, was appointed by President Obama on Jan. 20, 2009,
and was unanimously confirmed by the Senate.
"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 released by the
commission. "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
She becomes the first major departure from the Obama
administration's team of financial regulators. Schapiro will also
relinquish her position as one of the five members of the commission,
the federal agency that oversees Wall Street and the broader financial
Obama expressed his "deep gratitude" to Schapiro for her work.
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. "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."
Schapiro took control of an agency staggered by the nation's
financial crisis and embarrassed by its failure to uncover Bernie
Madoff's Ponzi scheme. In March 2009, Madoff pleaded guilty to 11
federal felonies for a scheme that defrauded thousands of investors of
billions of dollars.
Much of the financial crisis developed after
banks and mortgage brokers provided mortgages to home buyers without
rigorously verifying their ability to repay the loans, then sold the
mortgages to investment banks that bundled them into securities, which
were sold to investors.
The value of those packaged securities,
amounting to billions and billions of dollars, began to drop as
homeowners struggled to make payments they couldn't afford. The housing
market's eventual crash led to massive foreclosures and the bankruptcy
of investment banks and mortgage lenders, such as Lehman Brothers and
Under Schapiro, the SEC reached its largest
settlement ever with a financial institution. Goldman Sachs agreed in
July 2010 to pay $550 million to settle civil fraud charges that it
misled investors about mortgage securities in 2007. Similar settlements
followed with Citigroup JPMorgan Chase and others.
The SEC has
implemented new regulations for securities backed by assets, such as
mortgages, begun crafting new rules for derivatives, and required hedge
fund advisers to register and become subject to more SEC oversight.
The SEC also has developed rules to allow investors to vote on
executive compensation packages and receive more complete information
about company boards of directors.
Schapiro also oversaw
increased regulations put in place after the 2010 flash crash, the
automated trading of stocks that set off a steep plunge in stock
markets. And she took steps to launch investigations more quickly,
more easily pursue tips and complaints and identify wrongdoers through
upgraded market intelligence methods. The agency brought a record 735
enforcement actions in fiscal 2011 and 734 in fiscal 2012.
to becoming SEC chairman, Schapiro was CEO of the Financial Industry
Regulatory Authority -- the largest non-governmental regulator for all
securities firms doing business with the U.S. public.
previously served as an SEC commissioner from December 1988 to October
1994. President Ronald Reagan first appointed her and she was
reappointed by President George H.W. Bush in 1989. President Bill
Clinton named her acting chairman in 1993.
She left the SEC when
President Clinton appointed her chairman of the Commodity Futures
Trading Commission, the top federal regulator for trading in oil, wheat
and other wholesale commodities, where she served until 1996.