S.E.C. Choice Mary Schapiro Is Sued Over a Merger of Regulators

[DeepModem Mom]

Source: New York Times

Mary L. Schapiro, who appears this week at a confirmation hearing on her selection to head the Securities and Exchange Commission, has been accused in two lawsuits of making misleading statements to quickly complete a merger of regulatory organizations after which she received a 57 percent raise in her pay.

The merger involved the regulatory units of the New York Stock Exchange and the NASD two years ago. Ms. Schapiro was then head of the NASD, and she spent months traveling the country to persuade its 5,100 members to support it. The merger created a new self-regulatory organization, the Financial Industry Regulatory Authority, or Finra, where Ms. Schapiro is the chief executive. The Securities and Exchange Commission relies on Finra to police Wall Street.

Among the misstatements that she is accused of making is that the Internal Revenue Service had prohibited the NASD from paying each member more than $35,000 as part of the merger deal. Although an NASD proxy statement issued while the deal was pending said that the I.R.S. would not permit the organization to give more compensation to members, the I.R.S. did not actually issue a ruling on the matter until March 2007, long after the deal closed and three months after the members voted to approve it.

Lawyers representing Ms. Schapiro, Finra and other senior executives have fought vigorously to keep the I.R.S. ruling — and court references to details of that ruling — under seal. Last January, a federal judge in New York denied a request by The New York Times to unseal the ruling and other documents in the case.

Ms. Schapiro’s lawyer has denied the lawsuits’ allegations and, in a recent interview said that the second suit, filed shortly after her selection, is an opportunistic effort to pressure the defendants to settle. The first, dismissed by a federal district judge in New York, is on appeal....

***

An official at the Obama transition said that the lawsuit had been examined during the vetting process and that Ms. Schapiro would not have been selected if it were seen as a problem....

Read more: http://www.nytimes.com/2009/01/12/business/12schapiro.html?ref=todayspaper&pagewanted=all

[No Elephants]

1. K & R

[kestrel91316]

2. Anybody can be sued for anything in this country. I know firsthand.

Doesn't mean squat.

What matters is what a judge or jury decides. In my case, a judge decided in my favor, with prejudice.

[Robbien]

6. She took two regulatory agencies and merged them into one SELF-regulatory agency

Which is criminal in my opinion.

However what she is being sued about is that after the merger scam, the vultures weren't sharing the wealth appropriately in their opinions.

[KoKo]

3. "...after the merger, Ms. Schaprio's compensation rose to more than $3.1 million...."

From the article:


"After the merger, Ms. Schapiro’s total compensation rose to more than $3.1 million, from almost $2 million. The pay package, while not outsize by Wall Street standards, is large for a nonprofit organization. Mr. Perone, the Finra spokesman, said the raise was the result of Ms. Schapiro’s promotion to a higher job. He said her predecessor had received about $6 million in compensation. Other top executives at the new entity received pay increases of around 20 percent after the merger."

[KoKo]

5. Unfortunately many of his financial Advisors and Vetters are from the same group

who helped bring us the Wall St. Banking Disaster. There was little he could do about that since the expertise is with those same enablers. :shrug:

[loudsue]

9. Bingo! We've got a winner!!

There's the "ruling class" then there is the peasant class. This country has gone to hell in a handbasket.

[WhiteTara]

10. there are many who are not enablers

they just haven't been asked yet. Maybe now they will be.

[Baby Snooks]

4. Obama's Table....

Who put this table together?

[Julian_the_apostate]

7. A Bush-era official personally profiting...

for a merger of regulatory agencies overseeing the NYSE and Nasdaq securities and then trying to cover up inconvenient details about compensation; whatever Ms. Shapiro's intentions, she's got a lot of explaining to do. If this doesn't pass the stink-on-ice test of the Obama transition team, please let someone in the Senate rake her ass over the coals about this--I don't want another Christopher Cox.

[DeepModem Mom]

8. Thanks for your post, Julian -- welcome to DU!