Who is Mary Schapiro?:
Ms. Schapiro serves as CEO of the Financial Industry Regulatory Authority, the largest non-governmental securities regulator for U.S. public companies. It is the consolidation of the National Association of Securities Dealers ("NASD") and other regulatory arms of the NYSE. Schapiro was the Chairman and CEO of the NASD. She has also been Chairman of the Commodity Futures Trading Commission and a Commissioner on the SEC, appointed as Acting-Chair by President Clinton in 1993.
Why is the SEC Important?:
The SEC is the Securities and Exchange Commission. The SEC regulates the stock market by requiring standardized information about companies is available to investors. It also prosecutes companies that lie about their information. This insures transparency, so that investors know the fair market price of stocks. Transparency instills trust, which keeps the stock market operating efficiently.
Why Did Obama Name Schapiro to Head the SEC?:
Barack Obama is proposing more regulations for hedge funds and products such as Collateralized Debt Obligations and Mortgage-Backed Securities. It was the unregulated use of such derivatives that caused the bubble and subsequent bust that led to the current recession. Increased SEC regulation will be a large part of Obama's administration, and is needed to restore confidence in the financial sector and the economy.
The SEC is also criticized for not catching the Bernard Madoff Ponzi scheme.
Mary Schapiro has the experience in securities regulation under several administrations. She has the reputation for being a tough regulator, which will help instill confidence in the markets again. She is also supported politically by powerful Congressional leaders, such as Senator Charles Schumer (D-N.Y.) (Source: Forbes, Is Schapiro Enough for the SEC?, December 19, 2008)
