Wall Street Waits as SEC Fails to Bring Madoff-Inspired Reforms

[depakid]

Mary Schapiro, chairman of the U.S. Securities and Exchange Commission, said she wanted to show that her agency was cracking down after missing Bernard Madoff’s $65 billion Ponzi scheme. In May, she proposed that almost 10,000 money managers undergo surprise inspections to make sure they weren’t ripping off clients.

“Investors are looking to the SEC to assure the safekeeping of their assets,” Schapiro said at the time. “We cannot let them down.”

On Dec. 16, she settled for something less sweeping. Schapiro joined four other commissioners in approving a rule that requires about 1,600 U.S. fund managers to submit to unannounced audits, 83 percent fewer than seven months ago. The revision came after lobbying by fund companies, including executives from T. Rowe Price Group Inc., who met with Schapiro, and Legg Mason Inc., who met with another commissioner, SEC records show.

The diminished inspections rule is one of at least four Schapiro announced as a way to protect investors and boost confidence, then later scaled back or delayed. In August, she bought herself more time on a rule to rein in short-sellers, after lobbying by hedge funds. In October, Schapiro put off plans to give investors more power to decide who sits on corporate boards after the U.S. Chamber of Commerce questioned the SEC’s jurisdiction.

<snip>

“Mary has behaved admirably,” said David Ruder, a Republican SEC chairman under President Ronald Reagan who now teaches law at Northwestern University in Chicago. “She has really made an effort to show the commission is revitalizing itself.”

More: http://www.huffingtonpost.com/2009/12/30/postmadoff-reforms-at-sec_n_407039.html

[Blackhatjack]

1. Well the Curtain Hiding the Wizards of Wall St Remains Firmly In Place...(business as usual)

What does it take for even the most basic reforms to be instituted?

It seems like there must be plenty of other "Bernie Madoffs" still out there, and these Wall Streeters are insistent that the time is not yet right to discover them and bring their ponzi schemes to light. (After they have a chance to get their $$ out, I am sure it will be OK for the SEC to step in and give the average investors the bad news --that their money is gone!).

[depakid]

2. It's to be expected when you hire a regulator who didn't perform well at her the previous job

at FINRA up to and during the financial meltdown.

Rewarding failure with promotion usually foreshadows these sorts of results.

[katandmoon]

3. SHOCKER!