On a stormy night in October 2009, Mary Schapiro , the newly appointed head of the U.S. Securities and Exchange Commission, returned to her alma mater, Franklin & Marshall College in Lancaster, Pennsylvania, to be inducted into the hall of fame for student athletes. Receiving her award, she grasped the podium, confessed she was near tears and spoke of how she had never even seen a lacrosse game before attending college.
It had been two days since U.S. lawmakers negotiated all night to finish rules that would reshape the business of Wall Street. The 20-hour session left legislators, aides, lobbyists and regulators exhausted. Almost no one had a grip on all the details.
The municipal bond market, once a quiet corner of Wall Street, is slowly becoming a scene of scandal and regulatory inquest. The Securities and Exchange Commission recently accused New Jersey of giving fraudulent information about its finances to municipal bond investors. The SEC is investigating officials in Miami for similar problems.
As Manhattan’s top federal prosecutor during the 1990s, Mary Jo White could have sought the corporate equivalent of the death penalty: indicting Prudential Securities Inc. for fraudulently marketing $8 billion in ruinous energy partnerships to small investors.
Last month, a Senate investigative panel put a spotlight on how the accounting firm Ernst & Young LLP helped Hewlett-Packard Co. use gimmicks and loopholes to avoid taxes on billions of dollars of profits stashed overseas.