"Exhausted" SEC Chairman Mary Schapiro Steps Down

Mary Schapiro over the summer

Mary Schapiro, the head of the Securities and Exchange Commission, announced she was resigning today. President Obama said, "I want to express my deep gratitude to Mary Schapiro for her steadfast leadership at the Securities and Exchange Commission. 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. But 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."

Well, the SEC totally missed the Bernard Madoff multibillion-dollar Ponzi scheme (here's its 477-page opus on how it bungled that), leading Madoff to tell a hedge fund, "You know, you don't have to be too brilliant with these guys [the SEC], because you don't have to be"—because the SEC failed to even do basic work. The NY Times says, "Ms. Schapiro’s departure, which follows a bruising four-year tenure, was widely telegraphed. Ms. Schapiro, 57, has confided in staff members for more than a year that she was exhausted and hoped to leave after the November elections."

The Wall Street Journal reports:

The agency under Ms. Schapiro's stewardship has scored points with high-profile enforcement actions, such as its insider-trading case against hedge-fund manager Raj Rajaratnam. She also helped to ensure the agency's survival as some lawmakers considered doing away with the agency or sharply downsizing it in the wake of the Madoff scandal.

Other top priorities have faltered. Three commissioners complained Ms. Schapiro hadn't sought their input or courted their votes on the money-fund proposal that failed, and took the unusual step of criticizing the chairman and her proposal in public. After Ms. Schapiro failed to tighten rules on the money-market mutual-fund industry, she asked the Financial Stability Oversight Council to intervene and force a solution, a move that critics said undermined the independence of the SEC.

Anthony Michael Sabino, a professor at St. John's Peter J. Tobin College of Business, said that her "resignation from the SEC is not surprising, since there is usually a turnover when a President is elected to a second term. But there is more to it. Ms. Schapiro has been ‘embattled,’ to say the least. The agency still suffers backlash from not catching Bernie Madoff, it has been unable to overcome both Wall Street pushback and its own inertia to enact post Dodd-Frank regulations and initiatives, and overall Ms. Schapiro’s tenure has been a failure at best. The agency needs more money, more people, and more dynamic leadership."

Elisse Walter, a current SEC commissioner, will take over the job.