Mary Schapiro will step down next month as U.S. Securities and Exchange Commission chairwoman, turning over the reins to Commissioner Elisse Walter in a move industry observers say will bring little change at the agency.
Schapiro, 57, who took the SEC’s top job in 2009 as it reeled amid public rebukes for failing to rein in Wall Street abuses, will leave the post Dec. 14, the agency said in a statement Monday. President Barack Obama named Walter to succeed Schapiro as the SEC navigates a flood of mandates from the 2010 Dodd-Frank Act and pursues efforts to overhaul regulation of money-market mutual funds and high-frequency trading.
“Elisse Walter is a safe choice,” James Angel, a visiting finance professor at the University of Pennsylvania’s Wharton School of Business, said in a telephone interview. “She has the experience, she has credibility and she hasn’t offended too many people. With all the other problems the administration has to deal with, with the fiscal cliff and everything else, the last thing they need is a major confirmation battle.”
Walter, a Democrat who has backed Schapiro on virtually every rulemaking vote, was a senior executive vice president at the Financial Industry Regulatory Authority, where Schapiro was chairman and chief executive officer before rejoining the SEC.
Her views “are consistent with the views of the administration,” Ken Bentsen, executive vice president at the Securities Industry and Financial Markets Association, said Monday in a telephone interview. It’s “entirely logical and appropriate” for Obama to put her at the helm, Bentsen said.
It was unclear how long Walter might serve as chairman. Her five-year term as commissioner expired June 5, and under current law, she’s entitled to work through the end of 2013 without being reconfirmed. The president has the right to designate any sitting commissioner as chairman.
Obama intends to make a nomination to the SEC in the near future because Schapiro’s departure will leave the five-person panel one member short, according to an administration official. The person, who spoke on condition of anonymity, didn’t say whether the nomination would be for a chairman.
“I’m confident that Elisse’s years of experience will serve her well in her new position, and I’m grateful she has agreed to help lead the agency,” Obama said in his statement, which also praised Schapiro.
Senator David Vitter of Louisiana, a Republican on the Banking subcommittee that oversees the SEC, said the selection of Walter represents an “arrogant bypassing of Congress.”
“The Obama administration needs to appoint people who are focused on ending too-big-to-fail and bailouts, but unfortunately someone with that mentality won’t even get a fair consideration,” Vitter said in a statement.
Schapiro, a former Commodity Futures Trading Commission chairman, was appointed by Obama to run the SEC in January 2009, shortly after the credit crisis pushed Congress to approve billions of dollars in bailout funds for Wall Street firms that became overextended on the agency’s watch. A political independent, Schapiro replaced Christopher Cox, a Republican who had held the office since 2005, as she became the first woman to lead the agency on a permanent basis.
“When Mary agreed to serve nearly four years ago, she was fully aware of the difficulties facing the SEC and our economy as a whole,” Obama said. “She accepted the challenge, and today, the SEC is stronger and our financial system is safer and better able to serve the American people -- thanks in large part to Mary’s hard work.”
Walter, who served as interim chairman before Schapiro took over, will step in again as the agency works to implement Dodd- Frank measures such as the so-called Volcker rule limits on banks’ trading and tries to overhaul the money-market mutual fund industry after initial efforts by Schapiro ended in failure.
The start of Schapiro’s tenure was dominated by public criticism over the agency’s failure to detect Bernard L. Madoff’s multi-billion dollar fraud, which was uncovered a month before her appointment. At the same time, the regulator was under fire for its role in supervising Lehman Brothers Holdings Inc., which filed the biggest U.S. bankruptcy in September 2008.
Kayla Gillan, Schapiro’s deputy chief of staff until last year, said her former boss deserves credit for fighting back against arguments that the SEC be dissolved after its failures.
“Mary has served four of the most difficult years the SEC has ever faced,” Gillan said.