Washington Babylon — January 7, 2009, 8:47 am

Washington Post Takes Critical Look at Obama’s SEC Pick

When Barack Obama picked Mary Schapiro as head of the Securities and Exchange Commission, her nomination was almost universally hailed in the press. Schapiro, it was said, was just the type of hard-nosed reformer needed to clean up the SEC. I took a look at Schapiro’s record at the time and wasn’t terribly impressed. As far as I could tell, Schapiro had been complicit in the whole derivatives scandal as head of the Commodity Futures Trading Commission back in the mid-1990s.

Now Steven Pearlstein of the Washington Post has examined Schapiro’s record and also finds her to be an uninspired pick:

So what’s the problem with Mary Schapiro as SEC chairman? The problem is that there is nothing in her record to suggest that she is likely to clean house at the agency and launch a brutal and sustained assault on Wall Street culture.

Remember the good old days when corporations would routinely manipulate earnings so that they came out just as the analysts expected? Or when analysts used to issue buy recommendations for stocks they knew were lousy just because it helped their firms win investment-banking business? Or when brokerage firms would routinely put clueless customers in mutual funds that offered high commissions, not the best results? Or when investment banks would put aside shares in the hottest IPOs for the personal accounts of corporate chief executives who steered underwriting business their way?

These practices weren’t secrets — to anyone even vaguely familiar with the industry, they were hidden in plain view. And yet for years, no regulator, including Schapiro, was willing to risk being demonized by the industry, criticized by Congress and overturned by the courts to do what was necessary to stop these practices. Indeed, in every case, it was only after investors had lost their money and some other regulator had begun a crusade that Schapiro finally showed up to close the proverbial barn door.

Given the scope of the problems at the SEC, and the importance of the agency’s role in trying to restore some sanity to financial markets, Schapiro is clearly not the best choice.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $39.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

April 2015

The Joke

= Subscribers only.
Sign in here.
Subscribe here.

Abolish High School

= Subscribers only.
Sign in here.
Subscribe here.

Beat Reporter

= Subscribers only.
Sign in here.
Subscribe here.

Going It Alone

= Subscribers only.
Sign in here.
Subscribe here.

Rotten Ice

= Subscribers only.
Sign in here.
Subscribe here.

Life After Guantánamo

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

[Browsings]
Photograph by the author
Article
Rotten Ice·

= Subscribers only.
Sign in here.
Subscribe here.

“When I asked if we were going to die, he smiled and said, ‘Imaqa.’ Maybe.”
Photograph © Kari Medig
Article
Life After Guantánamo·

= Subscribers only.
Sign in here.
Subscribe here.

“I’ve seen the hell and I’m still in the beginning of my life.”
Illustration by Caroline Gamon
Article
Going It Alone·

= Subscribers only.
Sign in here.
Subscribe here.

“The call to solitude is universal. It requires no cloister walls and no administrative bureaucracy, only the commitment to sit down and still ourselves to our particular aloneness.”
Photograph by Richard Misrach
Article
No Slant to the Sun·

= Subscribers only.
Sign in here.
Subscribe here.

“She didn’t speak the language, beyond “¿cuánto?” and “demasiado,” but that didn’t stop her. She wanted things. She wanted life, new experiences, a change in the routine.”
Photograph © Stuart Franklin/Magnum Photos

Acreage of a Christian nudist colony under development in Florida:

240

Florida’s wildlife officials decided to remove the manatee, which has a mild taste that readily adapts to recipes for beef, from the state’s endangered-species list.

A 64-year-old mother and her 44-year-old son were arrested for running a gang that stole more than $100,000 worth of toothbrushes from Publix, Walmart, Walgreens, and CVS stores in Florida.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Driving Mr. Albert

By

He could be one of a million beach-bound, black-socked Florida retirees, not the man who, by some odd happenstance of life, possesses the brain of Albert Einstein — literally cut it out of the dead scientist's head.

Subscribe Today