While SEC Chairman Mary Shapiro is advocating a watered-down standard of conduct for brokers, which would not require them to act in their clients’ best interest, Republican fellow commissioners are trying to block many reforms she is willing to undertake, according to a recent Wall Street Journal article by Kara Scannell.
The normally unanimous five-person panel has splintered 3-2 four times under Ms. Schapiro. Over-zealous Republicans have actually accused Ms. Shapiro of bending over backward to satisfy Democrats. Ms. Shapiro denies that she is influenced by Democrat views. “While we are interested in Congress’s views, it doesn’t drive our agenda,” Ms. Schapiro said.
Too much resistance could make it hard for Ms. Schapiro to follow through on her announced strategy for revamping the SEC following the financial crisis and Bernard Madoff fraud. That strategy includes persuading Congress to give the SEC additional funding and wider authority.
One important issue before the SEC is whether to let shareholders nominate director candidates using the ballots that companies mail to shareholders instead of having to conduct expensive proxy fights, which rarely happen. Unions and some institutional investors support such shareholders rights. The SEC voted 3-2 last year to issue the proposal for public comment, with the two Republican commissioners dissenting.