President-elect Obama rounded out his economic team on Thursday, naming Mary Schapiro to head the Securities and Exchange Commission, an agency that has been the focus of criticism in recent weeks for failing to act on questionable practices that may have cost investors billions of dollars.
In addition, Obama announced Gary Gensler, a former Treasury official in the Clinton administration, as his pick to lead the Commodity Futures Trading Commission and Daniel Tarullo, a Georgetown law professor who also worked for President Clinton, to fill an open seat on the Federal Reserve Board.
Obama appeared with Schapiro, Gensler and Tarullo at a news conference on Thursday in Chicago — his fourth in as many days to announce administration appointments.
The president-elect used the occasion to call for "a shift in ethics on Wall Street."
The recent collapse of an alleged $50 billion dollar Ponzi scheme to defraud investors "reminded us yet again at how badly reform is needed," he said.
Obama said Washington was "asleep at the switch" and that the scheme, allegedly carried out by highflying investor Bernard Madoff, "was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball."
Schapiro, a former SEC commissioner under Presidents Reagan and George H.W. Bush, was appointed acting chairman of the agency under President Clinton.
Speaking at the news conference on Thursday, Schapiro said there must be "consistent and robust enforcement" of regulations to protect investors, saying it will be her top priority as SEC chief.
She currently heads the Financial Industry Regulatory Authority, which describes itself as the largest nongovernmental regulator for all securities firms doing business with the U.S. public. She was chairman of the CFTC from 1994-96, a post she was named to by President Clinton.
The SEC has been criticized for failing to heed earlier warnings about Madoff, whose alleged pyramid scheme has stunned Wall Street and hurt investors across the globe.
Since the Madoff scandal broke, revelations have surfaced that over the course of a decade, SEC staff failed repeatedly to investigate credible allegations against the trader. On Tuesday, SEC Chairman Christopher Cox ordered the agency's inspector general to determine what went wrong.
Gensler will be in charge of the CFTC, an independent agency created by Congress to regulate trading in the commodity futures and option markets.
Tarullo is leading Obama's transition team at the Treasury Department. His appointment to fill an open Fed seat must be approved by the Senate.
"These individuals 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," Obama said.
As a member of the Fed board, Tarullo would have an important voice in deciding crucial policy to help jolt the economy back to life.
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