Live blogging Mary Schapiro hearings

The confirmation hearings for Mary Schapiro are set to begin in 15 minutes and we’ll be live blogging them here at footnoted. You can also watch the live-stream here.

As we wait for the hearing to start, be sure to check out this story in today’s WSJ on Schapiro. The second paragraph says it all: “But a close examination of Ms. Schapiro’s record as a regulator shows she has infrequently pursued tough action against big Wall Street firms.” We’ll be listening to see how the various Senators probe Shapiro.

11:42: Snooze-fest is over. Must get more coffee.

11:40: Dodd asks about two lawsuits over creation of FINRA. Schapiro quickly dispenses with the question and says there’s “no merit” to the lawsuits.

11:39: Wondering what Schapiro has done for Hawaii that warrants Akaka’s praise.

11:33: Schapiro says WSJ article today presented a “completely unfair” picture of her record. “I have never been afraid to go after people who violate the public trust. There are no sacred cows.” Says she can “be as aggressive of an enforcer as anyone has ever been.” Says she was at the SEC when it was more aggressive under Levitt and Ruder.

11:28: What happened to the fireworks that everyone was promising? I think Schapiro’s daughter would have preferred the math test to having to listen to this.

11:22: Corker asks if there’s tools that SEC needs that they don’t have. Schapiro says she needs to get in there first. “As we move forward, we need to take a completely fresh see if we are really understanding the business and if the business is changing.”

11:15: Have to admit that I’m not quite sure I’m getting the stove-pipe reference.

11:14: Enzi (the only accountant on the panel) jokes about boring nature of accounting and asks about mark-to-market accounting.

11:10: Enzi says he’s very concerned about growing scandal of Madoff and asks how it slipped past FINRA’s radar. Says “stove-pipe regulatory structure” meant that FINRA was not aware and had not received any tips on Madoff. “Financial regulators need to cooperate a whole lot more. There’s sometimes been a bit of competion. Need to think of our efforts as community policing and sharing whatever intelligence we have.” Sounds kind of like the turf war between the CIA and FBI.

11:07: Question on proxy access. Says “it’s time for the US to step into the club” that allows major shareholders in around 40 countries to have access to proxies.

11:06: Question on international accounting standards, which Cox has been eager to push. Schapiro says, “I will take a big deep breath and look at this entire area carefully and will not be bound to the existing road-map.”

11:03: Schapiro says “there will never be enough resources to do everything we want to do”.

10:59: Reed asks Schapiro’s take on hedge funds. Schapiro says hedge funds need to be registered for better and stronger checks and balances. Also asks about SEC’s enforcement division and why penalty would have to be approved by the commission. “I would hope that would be quickly abandoned.” Schapiro says that if confirmed, she would “take the handcuffs off the enforcement division”.

10:55: Schapiro raises idea of SEC being folded into other agencies in answer to question by Shelby.

10:49: Shelby picks up on rating agencies because “they’re central to regaining trust”. Says banks don’t want to borrow money from one another. Mentions Bank of America needing more money to go ahead with Merrill deal. “Rating agencies used to mean something. They used to.” Says he hopes “we’re not going to be timid. We got to face reality.” Asks Schapiro about what the role of the SEC should be.

10:47: Dodd asks Schapiro if there’s a need for credit-rating agencies, given their role in the crisis. Schapiro says there will always be a need for third-party raters, but says we “don’t need broken ones”. Talks about need to deal with compensation model to deal with conflict of interest “to trust that the ratings are worth the paper they’re written on.”

10:42: Dodd questions Schapiro on Madoff activities and how she might have responded. “Effectiveness of examination programs of broker-dealers” needs to be fixed. “There can be no sacred cows. We need to go full-force against anyone who violates investor trust, regardless of their standing in the investment community.”

10:34: Shapiro introduces her family and begins with her statement. “We cannot underestimate the situation we’re now in. It is precisely during times like these that we need an SEC that is the investor’s advocate.” Highlights top priorities: re-invigorate enforcement and quotes Joseph Kennedy about “making war” against those who try to defraud investors. Second priority: Investors need to feel that someone is on their side. Third priority is to increase transparency and disclosure. “American people want and expect us to update the regulatory system that has failed them…I am under no illusion that this will be an easy job.”

10:32: Bennett says SEC not solely responsible for our difficulties and don’t think Schapiro can solve them all. Says he plans to support Shapiro’s nomination. So far, sounds like a love-fest to me. Hope this gets more interesting.

10:28: Menendez says there’s been “a failure of the SEC.” Says he wants to hear that Shapiro plans to “take no prisoners” and question everything.

10:27: Looks like most of the chairs are empty when the camera goes to a wide shot of the dais. Is the head of the SEC not important enough for the Senators to appear at?

10:21: Schumer says he was “very impressed” with Schapiro’s broad knowledge of the securities industry. “We need a much stronger regulator than we have had in the past.” Need to “reign in” the perilous excesses of the industry. Says regulators need to stop playing “whack a mole” and be more like doctors and sniff out problems in advance before they turn into deadly illness.

10:14: Shelby dismisses with normal pomp of opening statement and launches into sharp critique of SEC and its “ill considered approach” to self-regulation. “Next chairman of the SEC faces a difficult task of undertaking considerable reform of the agency. If it does not increase its effectiveness…the whole economy will suffer.” Questions whether SEC should be eliminated.

10:07 am: Dodd’s opening statement on importance of SEC, need to know that investors “can trust the cops on the beat.”