SEC rethinks it all

“Business as usual was simply not an option after revelations that the Securities and Exchange Commission—despite repeated opportunities—failed to uncover Bernard Madoff’s $50 billion Ponzi scheme.”

“At a Dec. 18, 2008, press conference, President-elect Barack Obama noted that this ‘massive fraud...was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball’ and ‘reminded us yet again of how badly reform is needed when it comes to the rules and regulations that govern our markets.’

“At the same conference, Obama announced that Mary Schapiro would be his pick to head the SEC.”

“Schapiro, who was previously the CEO of the Financial Industry Regulatory Authority, was sworn in on Jan. 27, 2009. Just a few weeks later, she named Robert Khuzami director of enforcement. The pair, along with the agency’s other leaders, have moved quickly to implement the president’s promise of regulatory reform.”

“Khuzami has embarked on a reorganization of the Enforcement Division, eliminating the first level of supervisors, giving senior officials independent authority to open investigations and shifting staff into specialized units. The agency has also established new procedures to screen and investigate the hundreds of thousands of tips it receives each year.”

“‘They’ve said all the right things and tried to plug all the holes,’ said Fiona Philip, a securities litigation partner at Washington-based Howrey. ‘They’ve put various steps in place. Now it’s a matter of seeing the fruits of that.’”