Schapiro's SEC Expected To Step Up Enforcement

Schapiro's SEC Expected To Step Up Enforcement - 2/4/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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Schapiro's SEC Expected To Step Up Enforcement
Zachary A. Goldfarb

Washington Post. February 4, 2009
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EXCERPT: Mary L. Schapiro, the new chairman of the Securities and Exchange Commission, will move quickly to invigorate its enforcement division and demonstrate the agency's relevance at a time when lawmakers are contemplating a vast restructuring of the nation's financial regulators, her associates said. Within days, Schapiro may do away with a three-year-old requirement that the enforcement division's lawyers get approval from the agency's commissioners before negotiating to impose penalties on companies accused of wrongdoing, according to people familiar with the discussions. This rule is considered by many SEC lawyers as an impediment to effective enforcement, and fines levied against corporations have fallen 85 percent since the requirement was put in place. She is also looking to address the heavy caseload carried by lawyers at the enforcement division, associates said. In recent years, staff turnover has been extremely high; enforcement teams have had only seven or eight lawyers, compared with a standard size of 15 lawyers; and the total number of lawyers available to investigate cases has decreased by 10 percent, according to a recent speech by Commissioner Luis A. Aguilar. Schapiro may redirect open SEC slots to the enforcement division and seek additional funds from Congress for new enforcement hires, one associate said. This would not be the first time Schapiro has been tasked with reviving a struggling regulatory agency. In 1996, she joined the National Association of Securities Dealers, the financial industry's self-regulator, after it was accused of failing to effectively oversee brokerage firms. Schapiro revamped the organization. She now faces the challenge of remaking the SEC, whose reputation has taken several hits, including the failure of prominent investment banks on its watch and revelations that it failed to detect the $50 billion Ponzi scheme allegedly perpetrated by Bernard L. Madoff.

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