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SEC Head Mary Schapiro To Step Down This Week


When Mary Schapiro was appointed by President Obama in 2009 as chairman of the Securities and Exchange Commission, as she put it...

MARY SCHAPIRO: It was a very, very difficult time in the agency's history.

MONTAGNE: Difficult because Bernie Madoff had just been arrested for his multi-decade, multibillion dollar Ponzi scheme, a scheme the SEC had failed to uncover.


Difficult because the country was in financial shock. Then-President George W. Bush had signed a big bailout to help large financial institutions, and there was a cry for more regulation.

MONTAGNE: Now, almost four years later, Mary Schapiro is getting ready to step down from the SEC.

GREENE: And for today's Business Bottom Line, Mary Schapiro joined us to look back at her tenure at the agency, which when she arrived, needed better technology and more staff.

SCHAPIRO: It was a daunting time, there's no question about it. But we set about, really, to do three things. One was to recruit terrific new leaders who would have a collaborative and collegial approach to all of the issues and an aggressive focus on investor protection. We set out to start to write the rules that needed to be written that would help protect investors, get them better information, more disclosure, and bolster the business conduct rules around how brokers and advisors operate. And we set out to revitalize the enforcement programs so that it would be in a position to move very aggressively.

So we set out on all three of those paths, in addition to helping to save the legislation that would ultimately become the Dodd-Frank Law.

GREENE: And I wanted to ask you about Dodd-Frank. I mean, that seems like such an important piece of legislation when looking back at the crisis and, you know, its rules regarding credit rating agencies and mortgage-backed securities. I mean, this was the contagion that really turned housing crisis into, you know, a real economic catastrophe. And I guess some people in Washington wonder why it has taken so long to finish Dodd-Frank. And they say that they just haven't felt the sense of urgency from your SEC.

SCHAPIRO: Wow. You know, the SEC got more than 100 rules to write under Dodd-Frank, the lion's share of all the agencies. And we've moved, I think, with a tremendous sense of urgency. But it takes a long time to write rules and get them approved by a five-member commission. That said, hedge funds are registered for the first time as a result of Dodd-Frank. Hedge funds are reporting systemic risk information to regulators, as a result.

We have laid the framework and the groundwork for a complete regulatory regime for the over-the-counter derivatives markets, which, of course, were at the heart of the financial crisis. We have a new whistleblower program that's fully in effect and rewarding people for bringing us information about ongoing violations of the securities laws. We have new rules that give shareholders the ability to vote on executive compensation.

We have new rules for asset-backed securities. We have new rules around credit rating agencies. Of course, there's lots more to do. We understand that, but we have made tremendous progress.

GREENE: With what remains on the list though, I mean with Dodd-Frank, you know, in many ways not firmly in place, can you tell Americans - can you give them the reassurance today that another meltdown won't happen?

SCHAPIRO: Sure. You know, you can never give a hundred percent assurance that there will be other issues. But I can say that I think people are better off today. Investors are better off today than they were four years ago.

GREENE: What is your biggest disappointment as you look back on your tenure?

SCHAPIRO: You know, this is going to sound a little bit like inside baseball. But my actually biggest disappointment is that the SEC is still subject to an annual congressional appropriations process, unlike the other financial regulators. But, as you know, Congress often doesn't even pass a budget. So we are sometimes left with tremendous uncertainty about what our resources will be on a year-to-year basis.

And that makes it very difficult to recruit and retain talent and to invest in the technology that we need to do the job. We got very close to being self-funded, but we didn't quite get it across the finish line. And I think that would have been a huge game-changer for this agency.

GREENE: I can imagine, though, some of the people who, just a few years ago, were questioning even the worth of the SEC altogether, you know, not wanting to approve that, not wanting to let you be self-funded that quickly, until the SEC shows that it can fix some of the problems that led to the crisis.

SCHAPIRO: I think that's right. I mean, appropriators don't like to give up the jurisdiction and the authority they have, and I certainly understand that. We would still be, obviously, fully subject to congressional oversight, and I understand that and appreciate that. And I think it's an important part of what Congress does. But the budget process makes it very difficult for agencies that need to be able to react quickly to events that are going on around them.

GREENE: Well, Mary Schapiro, the outgoing chairman of the Securities and Exchange Commission, thanks so much for talking to us.

SCHAPIRO: Thank you, David. Transcript provided by NPR, Copyright NPR.