In the Wall Street Journal yesterday, Harvey Pitt, the 26th chairman of the U.S. Securities and Exchange Commission, commented on the various challenges the SEC will face in the "post-Mary Shapiro era."
When Ms. Schapiro took charge in January 2009, the SEC was in disarray--an institutional piñata, bashed from outside by politicians and the press, and from inside by then-Inspector General David Kotz, whose constant probes following the SEC's failure to uncover Bernie Madoff's massive Ponzi scheme had created a culture of fear. Staff morale was low and the agency was rendered ineffectual, while its slightest missteps garnered elevated visibility and contempt.
That deplorable state of affairs changed with Ms. Schapiro's ascendancy. She replaced senior SEC staff, instilled agency employees with renewed enthusiasm and respect for the agency's mission, reorganized and streamlined decades-old bureaucratic and administrative structures, and fostered a new (and deeper) sense of professionalism at every level.
The results were palpable. The SEC's continued existence ceased ¬being questioned, its responsibilities were significantly expanded by the 2010 Dodd-Frank financial reforms, it brought record numbers of enforcement actions, and it adopted and proposed scores of congressionally mandated rules.
But, as Ms. Schapiro departs the agency she ably led, happy days most assuredly are not here again. The many problems the SEC must deal with are fraught with complexity and irrationality. Danger lurks around every corner.
Harvey Pitt then went on to enumerate and explain some of the pressing challenges the SEC will have to deal with, emphasizing Dodd-Frank. He discussed some of these very issues at a Manhattan Institute conference this fall.