Lawmakers react to Schapiro stepping down

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Schapiro announced Monday that she would step down from her post on Dec. 14, setting off what is expected to be a significant shakeup of the president's economic team.

Sen. Charles Schumer (D-N.Y.) hailed Schapiro's efforts to rebuild the SEC's damaged reputation in the wake of the financial meltdown, as well as her work to control high-speed trading following the May 2010 "flash crash" that saw the Dow Jones Industrial Average lose and regain roughly a thousand points in just minutes.

“Following the flash crash, she has laid the groundwork for the commission to rethink our increasingly fragmented market structure," he said. "The agency’s work in this area must continue in Chairman Schapiro’s absence."

Schumer also noted that Schapiro's new replacement as head of the agency, SEC Commissioner Elisse Walter, were classmates at Harvard Law School.

Senate Banking Committee Chairman Tim Johnson (D-S.D.) thanked Schapiro for her service "through the turbulent and historic aftermath of the financial crisis."

Several Democrats took jabs at Republicans for pushing reduced budgets for the SEC and criticizing its efforts to increase regulation of the financial industry.

Rep. Barney Frank (D-Mass.), the ranking member of the House Financial Services Committee, said Schapiro served admirably "in the face of obstruction from Republican appropriators." Pelosi contended Republicans worked to "defund and defang" the agency during Schapiro's tenure.

Meanwhile, Sen. Chuck Grassley (R-Iowa) chided the SEC following Schapiro's announcement, saying it has pursued "weak settlements" against bad actors on Wall Street.

"The SEC has to crack down harder, especially on repeat offenders," he said.

Grassley and Sen. Jack Reed (D-R.I.) have co-sponsored legislation that would increase the amount of fines the SEC can currently pursue, after Schapiro called on Congress to lift its caps on the penalties it can pursue. However, Grassley noted that the SEC has not always used its existing limits to the fullest.

Grassley also said SEC efforts to implement a new whistleblower program he supports have been "problematic," and that it was "disappointing" Schapiro was leaving the agency without naming a new inspector general following the departure of H. David Kotz in January.