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SEC's Schapiro cements a different type of legacy

December 3, 2012: 1:02 PM ET

Mary Schapiro

Mary Schapiro's job not well done.

FORTUNE -- We may now know why the SEC has been taking so long to finalize private placement marketing rules, as it was directed to do by this past spring's JOBS Act. From Reuters:

"Outgoing U.S. Securities and Exchange Commission Chairman Mary Schapiro delayed immediately implementing a rule to lift a ban on broader-based advertising for private placements in part because she feared it would tarnish her legacy as a pro-investor leader of the agency, internal SEC emails obtained by a U.S. House of Representatives oversight panel show."

Oh, I get it. The head of the SEC only is required to work on rules that square with her self-image as protector of the little guy. Never mind those pesky legislative directives. After all, no Congress or President is superior to an appointed regulator's narcissism.

To be sure, the JOBS Act did increase the likelihood that senior citizens in Sheboygan will get swindled by Jimmy from the boiler room (as I wrote in March). And the SEC clearly has an interest in doing what it can to mitigate the damage. But the issue here is that Schapiro seems to have perverted that interest by passing on the matter entirely. She simply chose not to do her job.

Even worse, the SEC has been covering for Schapiro. Two weeks ago, I called to find out when the current proposal might be finalized (the original deadline was in July). A spokeswoman told me that there was no expected date of completion. Not because Schapiro wanted to run out the clock on her tenure, but because Commission staffers needed more time to read and analyze the 200+ comments that have been submitted since the end of August. Apparently it's unreasonable to think such a thing could be completed in one more month. Or two more. Or three. Better leave it indefinite, so as not to miss another deadline.

Conventional wisdom is that Schapiro's successor, Elisse Walter, won't be long for the chair. So no grand legacies for her. Maybe something as modest as, you know, working through the papers on her desk.

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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