Sunday, December 21, 2008

New boss at the SEC

Many of the announcements that have been coming from the camp of the President-elect in recent weeks have been designed to assure us that not too much will change.

They've made these announcements even at the expense of disillusioning their base. One example (IMHO a trivial one) involves the choice of Rick Warren to pray at the inaugural ceremony.

Another example, one that has a good deal more to d with the pulic welfare, as well as with the interests of this blog, than who does the ceremonial praying, is: who will head the Securities and Exchange Commission?

Subect to Senate approval, Obama's answer to that question is Mary Schapiro.

The world of Wall Street knows Ms Schapiro. They're comfortable with her. This seems to have been her chief recommendation for the president-elect. At the press conference announcing this pick, he read from her resume: Mary Schapiro currently serves as the chief executive officer of the Financial Industry Regulatory Authority, the largest regulator for all securities firms that do business with the United States. Before that, she served as an SEC commissioner, and as chairwoman of the Commodity Futures Trading Commission

FINRA, of course, isn't a "regulator" in the public-sector sense. It's a New York based brokerage industry self-regulatory body. ("Not that there's anything wrong with that," I say in Seinfeldian tones. My goal here is clarity we can believe in.)

Schapiro was an SEC commissioner for six years, a period that began while Ronald Reagan was in office, continued through the presidency of the elder Bush, and into that of Bill Clinton. Under Clinton, she moved to the CFTC, where she served from late 1994 until early 1996 -- about 15 months. She thereafter accepted a job with the self-regulatory arm of the NASD. That arm then merged (in the distant summer of 2007) with the self-reg folks at NYSE to become FINRA.

Somewhat amusing sidebar: the first plan was to name the merged entiity SIRA, for "Securities Industry Regulatory Authority." That name was abandoned for reasons havibg something to do with Danish cartoonists, i.e. it was deemed insensitive because of its similarity to an Arabic term describing the traditional biographies of the prophet Mohammed. FINRA was adopted as least likely to give any offense to anybody.

You can make of this what you will. Personally, I have to leave now to worship at the holy church of flyng spaghetti, where we study our finra texts carefully for signs of the apocalypse. And we're really offended by this appointment.

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