SEC Commissioner Schapiro to Step Down After Four Tough Years


The SEC announced last week that Commission Chairman Mary L. Schapiro will end her tenure later this month. Previously an SEC commissioner from 1988 to 1994, Ms. Schapiro was appointed chairman by President Obama in January of 2009, in the wake of the financial crisis. She is the first woman to have held the chairman position full-time, and is also among the longest-serving commissioners in SEC history.

Ms. Schapiro’s four-year legacy is one of enforcement, and in each of the past two years the agency has brought more enforcement actions than ever before, including 735 enforcement actions in fiscal year 2011 and 734 actions in fiscal year 2012. One resulting victory was the SEC’s $550 million penalty against Goldman Sachs, the largest in SEC history, to settle claims related to Goldman’s involvement in the subprime mortgage meltdown. (Critics of Ms. Shapiro have downplayed the verdict, noting that no senior executives were singled out in the suit and that the penalty, while large, constituted only two weeks of Goldman’s earnings.) All told, Ms. Schapiro presided over the return of $6 billion to investors during her tenure.

Driven by tougher requirements of the Dodd-Frank Act, Ms. Schapiro also presided over one of the SEC’s busiest rulemaking periods in decades. In particular, she worked to pass a new rule creating a computerized monitoring system called the consolidated audit trail, or CAT, that will give the Commission unprecedented abilities to track trading activity. She also worked to streamline what many saw as an unnecessary bureaucracy, most notably eliminating a policy of her predecessor that required enforcement attorneys seek approval of the five member commission before opening any new inquiry.

Upon announcement of Ms. Schapiro’s resignation, President Obama immediately promoted current Commissioner Elisse B. Walter as her replacement. It remains to be seen whether Ms. Walter’s appointment will be on a permanent basis.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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