WASHINGTON (AP) - The new head of the Securities and Exchange Commission is ending a practice that she said had slowed the agency's enforcement efforts against corporate wrongdoing.
In her first public address as SEC chairman, Mary Schapiro said Friday that she was ending a two-year policy requiring agency enforcement attorneys to get approval from the commissioners before negotiating fines and penalties with companies accused of violations.
Schapiro said that practice "just sends the wrong message" and has caused delays. It is among the steps she said she is taking to revitalize the SEC's enforcement efforts and bolster investor protection.
Schapiro, named by President Barack Obama in December to head the SEC, took the agency's helm at a time when it is being called on to help restore investor confidence shattered by the worst financial crisis in more than 70 years. The SEC has faced heavy and unrelenting criticism over its failure to discover the $50 billion Ponzi scheme allegedly run by money manager Bernard Madoff - despite credible allegations against him being brought to the agency over the course of a decade.
Five high-ranking SEC officials appearing before a House panel this week received a tongue-lashing from lawmakers who accused them of impeding their inquiry into the agency's breakdown over the Madoff affair.
Schapiro, speaking to a gathering of securities lawyers and SEC staff members, also outlined other steps to speed enforcement efforts at the agency. Those include changes to the process for issuing subpoenas in investigations, and improvements in the handling of tips and whistleblower complaints.
"A strong and reinvigorated SEC will be on the beat to catch wrongdoing like never before," Schapiro said.
Asked about speculation that current rules requiring banks to mark down assets could be suspended as a form of relief in the financial crisis, Schapiro noted the SEC had recently recommended the so-called "mark-to-market" accounting requirements be retained with only possible revisions "around the margins."
The accounting standard requires banks to carry assets, such as mortgage-backed securities, on their books at how they are valued currently. Critics contend that has made the financial crisis worse by forcing banks to slash the value of assets depressed because of market conditions.
(Copyright 2009 by The Associated Press. All Rights Reserved.)