The head of the U.S. Securities and Exchange Commission, Mary Schapiro, will step down in December after a tumultuous four years in which she tried to rehabilitate the agency’s battered reputation.
In a statement issued on Monday, Ms. Schapiro said she would leave the agency on Dec. 14.
SEC commissioner Elisse Walter will serve as chairman-designate on a temporary basis, the White House said. A White House official said President Barack Obama plans to nominate a full-term replacement in the near future.
Candidates rumored to be on the shortlist include Ms. Walter, Treasury official Mary Miller and SEC enforcement director Robert Khuzami.
When Ms. Schapiro took over the agency in 2009, it was lambasted for lax oversight that critics said helped lead to the financial crisis and for its failure to catch now-convicted Ponzi schemers Bernard Madoff and Allen Stanford.
Much of her tenure was devoted to trying to reverse the agency’s reputation. She also had to fight numerous other fires – from the 2010 flash crash and losing court battles over SEC enforcement actions, to new challenges to SEC rule makings.
Early in her tenure, Ms. Schapiro streamlined the enforcement process by making it easier for staff to issue subpoenas and created specialized units, a new tips database and a whistleblower office.
She convinced lawmakers to expand the SEC’s powers and pledge a major funding boost.
In the past two years, the agency logged record enforcement actions, including 735 in the 2011 fiscal year and 734 in 2012, it said in a statement announcing Ms. Schapiro’s departure.
The SEC brought major cases involving conduct that led to the financial crisis, including a record $550-million (U.S.) settlement in 2010 with Goldman Sachs.
The SEC has also implemented some reforms to protect markets against major swings caused by errant technology, including circuit breakers and the so-called limit up-limit down mechanism.
But the agency has also been bogged down with major rules the 2010 Dodd-Frank financial regulation law required it to write, many of which are still in process.
Business groups have challenged much of the SEC’s recent rule-making efforts and won major battles, including convincing a federal appeals court to throw out the agency’s proxy access rule, which would have empowered shareholders to nominate directors to corporate boards.
Ms. Schapiro did not say in her statement what she planned to do next.
Ms. Schapiro is a registered independent who has been appointed by both Democrats and Republicans in her career. Yet she was mired in political battles at the agency and unable to get the votes needed on one of her signature issues, reform of money market funds.
She leaves much unfinished business for both Ms. Walter and whoever assumes the position on a more permanent basis.
In addition to money market reforms, the SEC is considering additional market structure safeguards and major Dodd-Frank initiatives, including a final version of the Volcker Rule.
“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,” Mr. Obama said in a statement.
Speculation had swirled for months that Ms. Schapiro would leave soon after the November election, and the announcement marks one of the first departures of Mr. Obama’s financial regulation team in the vote’s aftermath.
While her tenure at the SEC was marked by some controversy and her departure leaves uncertainty around major initiatives, former SEC officials said Ms. Schapiro helped revive a moribund agency.
“I think she saved the SEC, which was close to extinction when she took over,” former SEC chairman Arthur Levitt told Reuters.Report Typo/Error