President Obama’s economic team began its second-term makeover on Monday when Mary Schapiro announced she’ll step down as chairwoman of the Securities and Exchange Commission (SEC) on Dec. 14.
Schapiro’s exit marks the departure of a top Obama financial deputy who played an integral role in steering the financial system following the meltdown of 2008, and it begins what is expected to be a significant shake-up of the president’s economic team.
Geithner is now leading the administration’s efforts to reach a deal with Congress intended to prevent the host of spending cuts and tax hikes known as the “fiscal cliff.”
White House Chief of Staff Jack Lew might replace Geithner, which would create a new opening. Ron Kirk, the United States Trade Representative, is also widely expected to leave, while Obama must nominate permanent leaders of his Commerce Department and Office of Management and Budget.
In her four years at the SEC, Schapiro helped shape and implement the Dodd-Frank financial reform law, which, along with the healthcare law, is one of Obama’s signature legislative achievements.
The bulk of that law’s most sweeping regulations have yet to be implemented and will come in Obama’s second term, meaning Schapiro’s successor will have a central role in how the law unfolds.
Obama praised Schapiro for her work at the commission and said he was designating SEC Commissioner Elisse Walter to serve as the next chairwoman.
“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 in a statement. “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.”
Schapiro had a tumultuous tenure at the SEC in which she was tasked with stabilizing the financial system, restoring the SEC’s reputation and sparring with an industry resistant to the Wall Street overhaul.
“It has been an incredibly rewarding experience to work with so many dedicated SEC staff who strive every day to protect investors and ensure our markets operate with integrity,” said Schapiro in a statement. “Over the past four years we have brought a record number of enforcement actions, engaged in one of the busiest rulemaking periods and gained greater authority from Congress to better fulfill our mission.”
Schapiro sparred repeatedly with voices in the financial industry as she pushed to implement Dodd-Frank, but several industry groups praised her on Monday as a dedicated public servant.
“We are grateful for her dedication to strengthening protections for investors and the functioning of markets,” said Investment Company Institute President and CEO Paul Schott.
Schapiro also faced difficulties winning over Republicans wary of the administration’s efforts to expand the agency’s power. House Republicans repeatedly pushed to cut the SEC’s budget even as its Dodd-Frank workload expanded.
Schapiro also butted heads with Rep. Patrick McHenry (R-N.C.) after she aired concerns about the Jumpstart Our Business Startups (JOBS) Act, which he sponsored. Schapiro was concerned the law, aimed at making it easier for small businesses to raise capital, would curb key investor protections. McHenry accused her of dragging her feet on implementing the law.
The SEC touted its enforcement record under Schapiro on Monday, noting that it set new enforcement records in fiscal 2011 and 2012, bringing over 700 enforcement actions in each of those periods.
Schapiro took over the agency as it endured scrutiny for its oversight of financial markets leading up to the crisis, including harsh criticism of how it failed to detect the massive Ponzi scheme perpetrated by Bernie Madoff.
Schapiro was widely expected to be ready to leave following the election, after a grueling four-year stretch following the financial meltdown and battles with the industry over the Wall Street reform law.
She leaves the SEC with one major goal left unrealized: enhancing oversight of the
Schapiro has repeatedly warned that that corner of the financial market is still susceptible to damaging runs, but she failed to garner enough support at the SEC to advance her proposed overhaul. The Financial Stability Oversight Council (FSOC), headed by Geithner, has pressed the SEC to reconsider.
Schapiro previously headed the Commodity Futures Trading Commission (CFTC) and the Financial Industry Regulatory Authority. She originally joined the SEC under President Reagan before leaving to head the futures commission under President Clinton.
The SEC also noted that on Schapiro’s watch, the agency has been extremely busy writing rules making legislation like Dodd-Frank and the JOBS Act a reality.