SEC chair Schapiro: Our core mission compromised

By Sarah Frier

The Securities and Exchange Commission doesn’t have the resources or the support to do its job right, said its chairwoman on Friday.

“I’m concerned about our core mission,” Mary Schapiro told journalists at the Society of American Business News Editors and Writers conference Friday. “We can’t review all corporate filings the way we want to. We also need to be transparent about what we’re not doing, so there’s not a false sense of comfort about what the SEC is doing.”

She said further financial regulation is necessary and inevitable. Journalists can help by debating what regulation should look like and how it will be funded — not whether it should occur.

“Sometimes I read the financial news. and I feel that I have somehow been transported back to 1928,” Schapiro said. “Sometimes the debate seems to ignore decades of financial regulatory history.”

Schapiro, who took her post in January 2009 amid economic uncertainty, said hedge funds, swaps and derivatives transactions need to be more closely watched, and she’s not concerned about getting the rules written.

“What we’re not going to be able to do is operationalize them,” she said. Due to budget cuts, last year the SEC only examined 9 percent of investment advisers. “If you don’t really enforce a rule, do you really have a rule?”

With new rules after a financial crisis that exposed weakness and risk, there’s a lot more work to go around at the SEC, and further cuts — or a shutdown — from Congress would “hobble” their mission, Schapiro said.

She didn’t address the role journalism plays in financial oversight. But she did say their opinions can sometimes matter.

“Every now and then, a journalist raises a point we haven’t considered,” Schapiro said.

Sarah Frier is a UNC-Chapel Hill journalism student who will intern at Bloomberg News this summer. She is also editor of The Daily Tar Heel.