Views on improving the integrity of global capital markets
27 November 2012

The Schapiro Legacy: Outgoing SEC Chair Leaves Unprecedented Challenges and Opportunities

Looked at through the lens of action cinema, there is almost enough intrigue and drama in the last four years of SEC oversight to launch a new movie series. Never before in our history has this agency, so critical to markets and investor protection, been as tested to its limits as it has since 2008.

Just look at the list: An unprecedented financial crisis, the most monumental attempt at market reforms and regulation in many decades in the Dodd-Frank Act, Madoff, credit rating agency issues, money market fund issues, CDS and MBS, ETFs, a colossal flash crash incident, the resurrection of an SEC enforcement function in shambles — all this on a shoestring budget. Any one of these challenges would have been a seminal event in the tenures of most SEC chairmen. Having weathered and managed through them all is no small feat for Mary Shapiro, who will step down from her post in December

Not surprisingly, however, everything that was needed post crisis, even many of the critical regulatory initiatives and steps, have not been completed on Ms. Schapiro’s watch. Many of her critics have already begun to mark her down on that score. They saw her as too civil and a slave to consensus, causing the agency’s agenda to stall on key reforms. Some felt she was not tough enough to deal with the politics of getting things done in a hyper-political environment. As could be expected with such a huge list of “to do” items, the more controversial matters like the Volcker Rule and a single fiduciary standard would get deferred and allowed to cool, falling farther down the long list of priorities.

It does seem a bit premature to assess the impact of Mary Schapiro’s tenure as SEC chairman. A true examination of the extraordinary times and circumstances under which she was destined to operate suggests she can take considerable pride in her effort. Yet, only time will tell on the reform work she has begun. An important step in that regard is the baton handoff to her colleague and friend Elisse Walter. Our only advice to Commissioner Walter: it is not for the faint of heart.

Photo credit: ©

About the Author(s)
Kurt Schacht, JD, CFA

Kurt Schacht, JD, CFA, is the Senior Head, Advocacy Advisor, Capital Markets Policy at CFA Institute, where he oversees advocacy efforts and the development, maintenance, and promotion of the highest ethical standards of practice for the global investment management industry.

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