At SEC: change in chief, likely not policy

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WASHINGTON -- The leadership of the Securities and Exchange Commission will change next month. Its approach to regulation probably won't.

Mary Schapiro will step down as chairwoman after a tumultuous tenure in which she helped lead the government's regulatory response to the 2008 financial crisis.

Replacing her will be Elisse Walter, one of five SEC commissioners, whose career path has tracked Schapiro's for nearly three decades.

Walter has served under Schapiro at the SEC and the Financial Industry Regulatory Authority, the securities industry's self-policing organization. Both women worked at the SEC in the 1980s. Walter was also general counsel of the Commodity Futures Trading Commission when Schapiro led that agency in the mid-1990s.

She's expected to follow the approach Schapiro took at the SEC over nearly four years.

President Barack Obama Monday announced his choice of Walter, who will take over at a critical time for the SEC, which is seeking stricter rules for money-market mutual funds and must get into shape the so-called Volcker Rule, which would bar banks from making certain trades for their own profit.

The agency is also pursuing enforcement actions against banks over their sales of risky mortgage securities before the housing bust.

The president can fill the SEC chair's job without Senate approval because Walter has already been confirmed through 2013. That means Obama can avoid a potential confirmation fight until after the White House and Congress address the package of tax increases and spending cuts set to kick in next year. The president will need to nominate a permanent successor before Walter's term ends in December 2013.

John Coffee, a professor of securities law at Columbia University, said Walter's leadership would likely resemble Schapiro's. She was Schapiro's "close assistant" and "has positions almost identical with Schapiro," Coffee noted.

Walter, 62, a Democrat, was appointed to the SEC in 2008 by President George W. Bush. Earlier, she was a senior official at FINRA, which Schapiro led before becoming SEC chairwoman in January 2009.

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Schapiro's challenges have probably been the most difficult any SEC chair has faced, Coffee said. She took office after the financial crisis and the Bernard Madoff Ponzi scheme had eroded public and congressional confidence in the SEC. Since then, the agency has struggled with budgetary shortfalls.

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