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TheStreet Open House

Obama Needs to Fire SEC Chief Schapiro

NEW YORK ( TheStreet) -

If anything has characterized Barack Obama's presidency, it has been his fruitless efforts to make nice with constituencies he should be punishing, or at the very least, isolating.

His choice of Mary Schapiro to run the Securities and Exchange Commission was just one of many such mistakes, but it is high time for the president to admit his error and show her the door.

One doesn't need to do much more than watch TheStreet's interview with her (above) at the annual SIFMA Conference in New York Monday to see why Schapiro needs to go.

She made just shy of $10 million in her final year as head of FINRA, the securities industry's self-regulatory organization, according to Bloomberg, including $3.26 million for 2008 and $7.6 million as part of a "lump sum pension distribution."

The notion of a regulator earning that kind of money is incredible to many of us, but maybe it could be defended if Schapiro actually did some regulating.

Instead, Schapiro was just another do-nothing official during what will surely be remembered as the most de-regulatory period in the history of the U.S. securities industry.

Actually, Schapiro may have been worse than do-nothing. Her own SEC found last month that "FINRA employees have produced altered or misleading documents to Commission inspection staff on three separate occasions over the past eight years." Two of those occasions were while Schapiro was head of FINRA.

This document problem has followed Schapiro to the SEC, where a whistle-blower has accused the regulator of destroying documents related to a variety of investigations by its enforcement division.

Did Schapiro's FINRA nail Bernie Madoff while he was bilking investors out of $18 billion? Certainly not, but even after Madoff's fraud came to light, Schapiro messed things up, allowing the SEC's general counsel, David Becker, to participate in decision-making about how Madoff's victims should be repaid when she knew that Becker's mother had invested with Madoff.

Is Schapiro embarrassed by any of this? Is she ready to make amends? Take a look at the video and decide for yourself. At a time when public anger at Wall Street has never been greater, the least Obama could do is put someone in charge who isn't part of the problem.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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