[JURIST] US President-elect Barack Obama [transition website] on Thursday named [press release] Mary Schapiro [professional profile] as the Chairman of the Securities and Exchange Commission (SEC) [official website]. Schapiro is currently the Chief Executive Officer (CEO) of the Financial Industrial Regulatory Authority (FINRA) [organization website], an independent regulator of US securities firms. Schapiro's appointment comes at a time of financial turmoil in the US and concern about the SEC's regulatory process in the wake of charges filed [complaint, PDF; JURIST report] against Bernard Madoff [JURIST news archive] and his securities firm for an alleged $50 billion fraud scheme. Obama said:
In the last few days, the alleged scandal at Madoff Investment Securities has reminded us yet again of how badly reform is needed when it comes to the rules and regulations that govern our markets. Charities that invested in Madoff could end up losing savings on which millions depend a massive fraud that was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball. And if the financial crisis has taught us anything, its that this failure of oversight and accountability doesnt just harm the individuals involved, it has the potential to devastate our entire economy. Thats a failure we cannot afford.Schapiro previously served as an SEC commissioner and as Chairman of the Commodity Futures Trading Commission [official website].
Financial regulatory reform will be one of the top legislative priorities of my Administration, and as a symbol of how important I view this reform, Im announcing these appointments months earlier than previous administrations have. [Schapiro] will help put in place new, common-sense rules of the road that will protect investors, consumers, and our entire economy from fraud and manipulation by an irresponsible few.
Schapiro will replace current SEC Chairman Christopher Cox [official profile], who said Tuesday that he would launch an immediate investigation [press release; JURIST report] into how the fraud allegedly perpetrated by Madoff went undetected for so long. The SEC will also look into relationships between SEC officials and Madoff's family members, including Madoff's niece, who married a former SEC lawyer in 2007. On Saturday, UK financial firm Bramdean Alternatives Limited [corporate website] raised concerns [statement, DOC; JURIST report] about the US financial regulatory process after its value dropped by more than 35 percent following news of its exposure to the fraud.