NASD Taps Schapiro To Be Top Regulator; Hiring of CFTC Head Is Part of Restructuring
The National Association of Securities Dealers will announce today that it has hired Mary Schapiro, chairman of the Commodity Futures Trading Commission, as its new chief regulator.</br></br>Schapiro, 40, said yesterday she will leave her post in January to become the first president of NASD Regulation Inc., which will oversee the Nasdaq Stock Market and register and regulate all stock brokers and other market professionals. The post is considered crucial in the NASD's effort to restore the damage done to its reputation by two ongoing federal investigations.</br></br>The NASD is transferring its regulatory responsibilities to an independent subsidiary in response to criticism that it has been so busy running the Nasdaq market that it has neglected the oversight duties it was given by Congress.</br></br>The Securities and Exchange Commission has served notice that it is preparing disciplinary charges against the NASD based on allegations that Nasdaq traders take advantage of small investors. And the Justice Department has sued the NASD to get records of trading that government lawyers contend is rigged against customers.</br></br>In an interview, Schapiro said she has yet to dig into the specific problems confronting the NASD. "I won't know what needs to be fixed until I get there and have some realistic assessment of the organization," she said. "I really believe that NASD has an important role to play and that I can help it do that more effectively."