SEC Nominee Pledges to Revitalize Enforcement, Has Concerns About IFRS


Mary Schapiro, President-elect Barack Obama’s nominee for SEC chair, testified Thursday before the Senate Banking, Housing, and Urban Affairs Committee that she would aggressively revitalize the SEC’s enforcement efforts.


When asked by committee Chairman Sen. Chris Dodd, D-Conn., about whether she would support certain actions that would help detect fraud such as the alleged Ponzi scheme run by Bernard L. Madoff Investment Securities LLC, Schapiro said she would move quickly to create a new process for handling tips and whistleblower complaints received by the agency. Schapiro said she would centralize the process under one point of contact and staff it to ensure intelligence received is properly examined and tracked.


Schapiro also indicated that there may be a need to expand the authority of the PCAOB. Her comments related to a PCAOB announcement regarding the registration of all broker-dealers and whether the PCAOB has the authority to inspect such registered CPAs if they do not audit issuers.


In response to a question regarding IFRS, Schapiro said she has concerns with the SEC’s current road map for transitioning U.S. public companies to IFRS.


“I will take a big deep breath and look at this entire area again carefully and will not necessarily feel bound by the existing road map that’s out for comment,” Schapiro said.


Schapiro highlighted her concerns about a lack of consistency in the application of IFRS, the cost for U.S. companies to switch to IFRS from U.S. GAAP and the independence of the International Accounting Standards Board, which she called her “greatest concern” about IFRS.


Schapiro is the CEO of the Financial Industry Regulatory Authority (FINRA). She was chairman of the Commodity Futures Trading Commission from 1994 to 1996 and was an SEC commissioner from 1988 to 1994.

Matthew G. Lamoreaux is a JofA senior editor. His e-mail address is



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