WASHINGTON — Moving quickly to name a new head of an agency under fire for failing to detect an alleged $50-billion Ponzi scheme, President-elect Barack Obama has selected Mary Schapiro, an experienced Wall Street regulator, to be chairwoman of the Securities and Exchange Commission.
The selection of Schapiro, 53, a former SEC commissioner, was confirmed by a Democratic official Wednesday night. Obama is expected to announce her nomination at a news conference today in Chicago.
"She has the skills, the intellect and the character to be a superb SEC chair," said former SEC Chairman Arthur Levitt, who served with her on the commission.
Schapiro, who would be the first woman to head the SEC in a permanent capacity, is chief executive of the Financial Industry Regulatory Authority, or Finra, a nongovernmental, self-regulatory body for the securities industry.
Finra oversees about 5,000 brokerage firms and 680,000 registered securities representatives. Its website says its "chief role is to protect investors by maintaining the fairness of the U.S. capital markets." Finra was formed in 2007 by the merger of the National Assn. of Securities Dealers and the regulatory arm of the New York Stock Exchange.
Schapiro was an SEC commissioner from 1988 to 1994, serving as acting chairwoman for about two months in 1993 before Levitt took over. In 1994, President Clinton named her chairwoman of the Commodity Futures Trading Commission.
If confirmed by the Senate, she would succeed SEC Chairman Christopher Cox, who is facing sharp criticism for the agency's handling of the financial crisis and for its failure to identify the alleged Ponzi scheme of Bernard Madoff. Cox has said he is "gravely concerned" that the SEC's staff didn't act on allegations it received about Madoff over the last decade and has ordered an internal investigation.
SEC critics, including some lawmakers, say the agency needs an overhaul. Treasury Secretary Henry M. Paulson has called for a merger of the SEC and Commodity Futures Trading Commission as part of a restructuring of the government's financial regulatory agencies. Obama has criticized Paulson's plan as inadequate.
Obama's choice of Schapiro indicates that a merger may be part of his regulatory restructuring, said Barbara Roper, director of investor protection at the Consumer Federation of America.
"If that's the plan they have, they've got someone who would be familiar from the beginning with both of those organizations," Roper said.