Securities and Exchange Commission Historical Society

Regulating the Regulators: The Executive Branch and the SEC, 1981-2008

“A Terrific Responsibility”

“Whether it’s being Chairman of the SEC or President of the United States, the problems that you’re going to have to confront aren’t the ones that you may necessarily have planned on confronting. They may not be the ones you’re good at. What you’d better be ready to do is accept that that’s part of the job, and accept that the criticism is going to go along with it, and that you’re going to have to make some people angry, and that you may be proven, in retrospect, in part to have been wrong.”

- March 10, 2010 Interview with James Doty

In March 2008, just before the financial crisis emerged, SEC Chairman Christopher Cox had cautioned staff that no independent agency lasts forever, citing the example of the Interstate Commerce Commission, founded as the first independent agency in 1887 and dissolved in 1996.  As 2009 began, questions rose whether the U.S. Securities and Exchange Commission would also close.  But President Barack Obama signaled his commitment to a renewed SEC with his appointment of Mary Schapiro, FINRA Chief Executive Officer and a former SEC Commissioner, as Chair.  “Mary understood that the Commission had to move first, or Congress would do so in a way that harmed the SEC as an institution.  If the SEC came forward and was thoughtful, we could argue to Congress that we had things under control.”73 

The agency retained its mandate with the passage of the Dodd-Frank Act of 2010 in response to the financial crisis.  “Dodd-Frank, ironically, is more about what it didn’t do to the SEC than what it did to the securities laws.  It didn’t put the SEC out of business.”  But the Dodd-Frank Act put a strain on the SEC staff.  “Our political position was significantly weakened by Madoff.  But the morale of the agency was seriously shook by Dodd-Frank.”74 

Schapiro recognized the need for transformation within the agency.  As she prepared to leave office in 2012, she noted, “I am proud that our staff have already made this one of the most productive periods in the agency’s history.  Just as important is a cumulative effect of individual accomplishments through our fundamental approach in improvements in culture, management approach and attitude, changes that will allow the SEC to continue at the same high level in the years ahead regardless of the challenges that arise.  The burst of activity isn’t just a result of circumstances or a reaction to the financial crisis.  It’s an indication that the SEC is evolving in step with the rapidly-changing markets.” Elisse Walter, who would succeed Schapiro as Chair, remembered, “Mary’s finest accomplishment is that the SEC still exists because there really was a period of time when it looked like that might not be the case.”75 

The next President of the United States will have an economic regulatory policy and a view of how independent agencies should work, and thus will impact the U.S. Securities and Exchange Commission’s leadership and activism going forward.  As President Franklin Roosevelt stated in a 1938 message to Congress: “The people, in and out of the halls of government, who encourage the growing restriction of competition either by active efforts or by passive resistance to sincere attempts to change the trend, are shouldering a terrific responsibility.  Consciously or unconsciously, they are working for centralized business and financial control.  Consciously or unconsciously, they are therefore either working for control of the government itself by business and finance or the other alternative – a growing concentration of public power in the government to cope with such concentration of private power.”76

Previous Next

Related Museum Resources

Oral Histories

01 July 2013

David B.H. Martin

22 June 2015

Troy Paredes

07 June 2016

Robert Plaze

09 May 2014

Elisse Walter


06 November 2014

The Experts Forum: Dodd-Frank, Derivatives and Structured Finance

Moderator: Craig Lewis
Presenter(s): Christopher Culp, Jason Kravitt, James Overdahl
07 June 2012

A Creative Irritant: The Relationship between the SEC and Accounting Standard Setters (Thirteenth Annual Meeting)

Moderator: George Fritz
Presenter(s): Dennis Beresford, Edmund Jenkins, A. Clarence Sampson
13 September 2011

Bingham Presents 2011: Enforcement After Dodd-Frank

Moderator: Jeffrey Manns
Presenter(s): Eric Grossman, Robert Khuzami, David Meister, Susan Merrill
24 September 2009

Bingham Presents 2009: New World of Financial Regulation

Moderator: Theresa Gabaldon
Presenter(s): Jesse Eisinger, Roberta Karmel, Joseph Stiglitz
04 June 2009

The Future of the SEC (Tenth Annual Meeting)

Moderator: Joel Seligman
Presenter(s): Theresa Gabaldon, Lyman Johnson, Donald Langevoort, Donna Nagy, Robert Thompson

Permission for Use

The virtual museum and archive is copyrighted by the SEC Historical Society. The Society reserves the right to restrict access to or use of the museum by any user at any time.

Users are prohibited from sharing or downloading any material for publication or commercial purposes without written permission from the Executive Director. Requests for permission must be submitted by email and specify the material requested and for what purpose.

Material used with the Society's permission should be credited to: