Schapiro promises to restore trust in financial markets
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Your support makes all the difference.President-elect Barack Obama's pick to lead the Securities and Exchange Commission promised to restore trust in financial markets at a "perilous time" for investors, but critics wondered whether Mary Schapiro has the "outsider" credentials required to engineer a radical overhaul of the tarnished regulator.
Ms Schapiro, a career regulator who currently heads Finra, the finance industry's self-regulatory body overseeing broker-dealers, will inherit an organisation that failed to spot the looming crisis in the credit markets or the biggest fraud in Wall Street history.
And in a particular embarrassment, Ms Schapiro employed Mark Madoff, son of disgraced Bernard Madoff and a senior employee at the family firm, to serve on the board of the division that reviews disciplinary decisions made by Finra. Critics have argued that financial regulators are too closely enmeshed with the industries they regulate.
Analysts said she appeared to have been picked less for any crusading background than for her strong reputation as an administrator who could help the Obama administration merge the SEC into a new super-regulator.
Ms Schapiro has already once been a commissioner of the SEC, and will be its chairman if confirmed by Congress next year. She has also run the Commodity Futures Trading Commission, with which it could be merged.
"She is not exactly the 'change' candidate," said Barbara Roper, director of investor protection at the Consumer Federation of America, a Washington-based campaign group. "What you need at the SEC right now is someone who takes a very different approach on policy issues and has a radically different regulatory philosophy – namely, one where they actually believe in regulation."
Charles Elson, director of the centre for corporate governance at the University of Delaware, said the SEC's critics could hardly have expected a radical choice, given that Mr Obama's transition team includes a former head of the SEC, a former commissioner and one of Chicago's top financiers. "This is not a controversial pick, it's a Washington establishment pick," he said.
Mr Obama promised regulatory reform and tough new rules to "crack down on the culture of greed and scheming that has led us to this day of reckoning".
Ms Schapiro said: "This is a perilous time for investors. Americans are looking to policymakers and regulators to restore stability and trust to our fin-ancial markets."
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