Mary Schapiro and Mark McGwire
By Larry Doyle on January 15, 2010 at 2:35 PM in Current Affairs, Economy, SEC
“I’m not here to talk about the past.”
Mark McGwire, the steroid-abusing home run hitting phoney, may have issued a massive mea culpa this week, but his career will forever be defined by his March 2005 Congressional obfuscation.
In my strong opinion, Mary Schapiro is the financial industry’s equivalent of Mark McGwire. How so? In McGwire’s 2005 testimony, he very much wanted to position himself as a positive influence for future developments regarding the use and abuse of steroids in baseball. Fast forward to January 14, 2010 and we witness Mary Schapiro very much trying to assume the same positive position in her testimony and answers to the Financial Crisis Inquiry Commission. In Schapiro’s opening statement, Testimony Concerning the Financial Crisis, she states as much:
To assist the Commission in its efforts, my testimony will outline many of the lessons we have learned in our role as a securities and market regulator, how we are working to address them, and where additional efforts are needed. I look forward to working with the FCIC to identify the many causes of this crisis.
Oh, how kind.
Recall that the charge of the FCIC is to look into the past in order to determine the root causes of our economic crisis. What is Ms. Schapiro’s past? From 1996 until her appointment a year ago as SEC Chair, Ms. Schapiro was affiliated with the NASD (now FINRA). Does she address her past and that of FINRA in her testimony? Swing and a miss.
Schapiro makes reference to the SEC approximately 110 times in her opening statement. She references the NASD (FINRA) once, and that being a comment regarding the ‘uptick rule’ in 1994.
What about your past, Mary? You present yourself as a fan of greater transparency and disclosure. You reference disclosure or the need for greater disclosure approximately 25 times in your statement. You reference transparency or the need for greater transparency approximately 15 times in your statement.
What about greater disclosure and transparency of activities that occurred on your watch at FINRA? You have the gall to address the work the SEC has done since December 2008 in regard to auction-rate securities. Why won’t you disclose the details regarding FINRA’s liquidation of $647 million auction-rate securities in mid-2007?
Not here to talk about the past, perhaps?
You have the gall to promote yourself as a big fan of transparency. Why won’t you call off your lawyers who made an impassioned plea just yesterday in front of Judge Jed Rakoff to keep documents relating to the formation of FINRA sealed? (Judge Rakoff will issue a ruling on the media’s request to unseal these documents by February 15th). Where’s the transparency in that?
Not here to talk about the past, perhaps?
You concluded your opening testimony yesterday by stating:
We cannot hesitate to admit mistakes, learn from them and make the changes needed to address the identified shortcomings and reduce the likelihood that such crises reoccur.
I would maintain that these words are empty and meaningless if you do not fully open the books and records of FINRA so the disclosure and transparency you seemingly support can be laid out for all America to see.
Then and only then can our country truly move forward.
The ball is in your court, Mary. Who are you? Will you talk about your past at FINRA or are you Mark McGwire?
For those interested in hearing Ms. Schapiro’s proclamation as a champion of greater transparency, fast forward this video clip below (from yesterday’s FCIC session) to the 145:50 mark.
LD
by Ronald Scott
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