Schapiro faces huge job in reviving SEC
As President-elect Obama's nominee to lead the SEC, Mary Schapiro will be confronted with a slew of problems. The agency that's supposed to police Wall Street increasingly finds itself derided as Keystone Cops. Steve Henn reports.
Mary Schapiro, CEO of the Financial Industry Regulatory Authority, speaks after being named by President-elect Barack Obama as his choice to head the U.S. Securities and Exchange Commission during a press conference at the Drake Hotel in Chicago. (Scott Olson/Getty Images)
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TEXT OF STORY
Tess Vigeland: The SEC is not a pretty place to be these days, what with the financial industry imploding, scandals erupting. But Mary Schapiro apparently wants the job of reviving the agency. She previously served as an SEC commissioner and she currently heads up the Financial Industry Regulatory Authority. Schapiro faces a slew of problems at the agency that is supposed to police Wall Street, but increasingly finds itself derided as Keystone Cops. Marketplace's Steve Henn reports.
Steven Henn: The reputation of the Securities and Exchange Commission has been battered in the past year. Charged with sounding the alarm if and when the nation's biggest investment banks were headed for disaster, it failed. This fall, John McCain called for the Commission's Republican chair to resign. And then last week, Bernie Madoff was accused of the biggest financial fraud in American history. Still Mary Schapiro says she wants this job.
Mary Schapiro: Obviously there is much work to be done there.
But what is the job she needs to do? Insiders she'll need to boost moral ? support the enforcement staff and investigators ? while at the same time improving the agency's ability to recognize big risks facing regulated firms. So can Schapiro throw on cape and some tights, and save the SEC?
Hal Scott: No. the problems of this agency run very deep.
Hal Scott is a law professor at Harvard and an expert in capitol market regulation. He says Schapiro's well-qualified but...
Scott: I think we have to create new agency with a different culture to regulate the entire financial system.
Most observers agree America's system of financial regulation is hopelessly fragmented. Here's just a partial list of agencies in this mix. There's the OCC, the OTS, the SEC, the FDIC, the CFTC, and the Fed. Yet even with all those regulators running around Scott says no one is effectively keeping an eye out for big financial risks. And today, Obama said reforming this system would be one of his top priorities.
In Washington, I'm Steve Henn for Marketplace.
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From Goose Creek, SC, 12/19/2008
I have not reviewed the other agencies listed but, the problem is not with the SEC but, the reasoning behind the SEC. The SEC was created as a result of bad times. No one want's to see a bunch of financial agents and FBI "Trust Busters" when times are good but, want to know where they're at when times are bad. The SEC is an easy scape goat. They put out warnings about WorldCOM and, Citi (not 100% sure about Citi) but, no one wanted to listen. Now where saying it's they're fault they didn't catch these banks who didn't post there losses and "right offs"; it's there fault they didn't catch people like Bernard Madoff who, Voluntarily, turned themselves over. If the SEC started investigating companies and CEO's out of mere suspicion we would screem bloody murder but viloation of rights. We need to blame our congressional leaders who receive kick backs from these banks and companies who make these ungodly mergers and become to big to fail. If Walmart all of a sudden failed no one would blame Hiliary or Bill Clinton but, they are one of the reasons Walmart is so huge. Thee SEC is the equivlent to the IT department of a company; when all the computers and phones are working no one things about IT matter fact people wonder why the IT guys(ladies inclusive with guys) are even there but, when the network or an indiviual computer goes down, then they want to know wht the IT guys couldn't prevent it, why is it down, why did it go down. No one ever talks about how the IT Manager talked about spending extra to put additional virus detection software on computers. Same with the SEC, it's an easy politicial scape goat. Changing the SEC and how they work is a waste of tax dollars, the reasoning for them has to change which means we need honest politicians and that job is only cut out for Jesus himself.
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