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Tough questions for SEC's Mary Schapiro

With Mary Schapiro testifying before the House Financial Services Committee, the Project on Government Oversight has released some toughly-worded questions for her. A few include:

  • Why has the SEC only awarded five whistleblower reward payments in the past two decades? What is the agency doing to prepare for its soon-to-be-enhanced authority to make reward payments to whistleblowers who provide the agency with tips, and how is the agency improving its procedures for protecting whistleblowers against retaliation?
  • Are you aware of the serious allegations of whistleblower retaliation at the SEC's Ft. Worth office, as recently confirmed by the Inspector General? What steps has the agency taken to hold the Ft. Worth officials accountable for retaliating against their own employees, one of whom played an instrumental role in uncovering the Stanford Ponzi scheme?
  • Given your experience as the former head of FINRA in the period leading up to the financial crisis, do you still believe that self-regulation is an appropriate model for overseeing the brokerage industry? Why, in your view, did FINRA fail to adequately regulate many of its larger firms that were at the heart of the financial crisis, including Bear Stearns, Lehman Brothers, and Merrill Lynch, and why did FINRA fail to detect the Madoff and Ponzi schemes? How do you justify the outrageous compensation paid to FINRA executives in 2008, a year in which the economy nearly collapsed and FINRA lost $568 million its own investment portfolio?

By Zachary Goldfarb  |  July 20, 2010; 11:48 AM ET
 
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