• Chairman Shapiro Defends Role of SEC, Admits Past Mistakes
  • May 11, 2009
  • Law Firm: Holland & Hart LLP - Denver Office
  • During a speech yesterday before a Denver meeting of the Society of American Business Editors and Writers conference, SEC Chairman Shapiro defended the role of the agency as the "investor's advocate," while acknowledging that, due to "a lack of resources or because of philosophy," an obvious dig at former Chairman Cox , in past years it was not "where investors most needed it, addressing their most pressing issues [and] responding to the changing world."  Chairman Shapiro's speech is part of the agency's campaign to rehabilitate its public image,  which includes announcing new Ponzi scheme asset freeze cases on the front page of its website.

    On the subject of regulatory reform, the chairman stated there was a need for system-wide consideration of risks to the financial system, but that any reform should preserve the SEC as the "independent agency that exists not just to protect Wall Street, but to protect Main Street."  This comment is a belated response to the Treasury Department's suggestion, made in early 2008, that the SEC should be abolished in favor of an uber-regulator representing a combination of the SEC, CFTC, and one or more bank regulators.  At the time, public statements by the SEC seemed to indicate that it agreed it no longer deserved to exist.

    Among other things, Chairman Shapiro stated the agency lacks a coherent system for assessing the more than 750,000 tips that it receives on an annual basis.  She stated that the agency would hire a consulting firm to assess and revamp the way the SEC handles multitude of  tips and complaints received each year to ensure that "each tip lands on the right desk and that the person reviewing it has the necessary skills."   Chairman Shapiro's speech was noteworthy in its candor and represents a good-faith effort to correct the SEC's  past mismanagement.