Mary Schapiro, President-elect Barack Obama’s nominee for chairwoman of the Securities and Exchange Commission, said today she would push to change the way credit-rating agencies are paid and slow the U.S. transition to international accounting standards as part of her pro-investor agenda.
In testimony at her confirmation hearing today, she also pledged to the Senate Banking Committee that she would try to expand regulatory oversight of hedge funds, credit default swaps and investor advisers.
Ms. Schapiro, who heads the Financial Industry Regulatory Authority Inc. of New York and Washington, said she would also revisit long-delayed efforts to let shareholders place their board nominees on companies’ proxy cards.
But most of all, she vowed to reinvigorate SEC enforcement efforts in the wake of the Bernard Madoff investment scandal and the agency’s failure to anticipate the collapse of Wall Street giants such as Lehman Brothers Holdings Inc. and The Bear Stearns Cos. Inc., both of New York.
“I’ve never been afraid to go after people who I’ve thought violated the public trust,” said Ms. Schapiro.
“One of the first things I’ll do is take the handcuffs off the enforcement division.”
Ms. Schapiro, a 53-year-old independent, has been an SEC commissioner, chairman of the Commodity Futures Trading Commission and head of the National Association of Securities Dealers.
Senators from both parties said they intended to vote for her, and the panel’s top Republican, Richard Shelby of Alabama, said her nomination would likely be approved and sent to the full Senate for a final vote.
“I believe you have the right experience and the right pragmatic approach to successfully reform the SEC,” said Sen. Charles Schumer, D-N.Y.
Democrats on the panel blasted current SEC Chairman Christopher Cox for lax oversight, and Ms. Schapiro also took a swipe at him while discussing the Madoff scandal.
She said that “stovepipe” U.S. regulation meant that Finra supervised only Mr. Madoff’s brokerage business while the SEC was responsible for the investment-adviser unit in which the fraud was committed.
Ms. Schapiro said that she met with Mr. Cox last August and told him that there had been “a migration” of professionals out of more tightly regulated brokerages to less-policed investment-advisory firms.
“The SEC has not shared our view that this is something to be concerned about,” she said.
SEC spokesman John Nester declined to comment.
