Sat, 06 Feb 2010
Mary Schapiro took over as the Chairman of the US SEC a year ago when the SEC’s reputation was in tatters. In a speech yesterday, she reviewed the achievements of the past year.
First of all, she believes that the problems of the SEC were at the top and that if the leadership at the top is changed, the rest of the organization had the competence and attitude required to deal with its challenges. Schapiro says: “having served as Commissioner 20 years earlier, I knew what the agency was capable of ... through this process, I witnessed firsthand the dedication and expertise that I had long believed embodied this agency”
Schapiro believes that the new hires she has made and the new technological initiatives that she has undertaken will be sufficient to enable the SEC to recover its last glory. My own sense is that the problems are not merely at the top but permeate the whole organization. The report on the Madoff investigations revealed problems at all levels of the SEC (see my blog post last year).
Schapiro lists the SEC’s achievements in enforcement during the last year and refers to the case that has been brought against State Street Bank. She says nothing about the Bank of America case where the judge has taken the SEC to task, and subsequently the New York Attorney General has seized the initiative.
On the rule making agenda also, Schapiro is unable to list too much of significance. Even the utterly misguided short sale restrictions of the crisis is cited as an achievement. Some minor changes on proxy rules, rating agencies and money market funds are also cited though none of these changes went far enough to make a serious difference.
Schapiro came to the SEC with high expectations after a succession of lacklustre leaders. I think she needs to do a lot more to fulfill these expectations.