9. The Trouble with Mary—and Gary

The Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) chiefs in charge of the Flash Crash investigation had a litany of strengths but also a cart full of heavy baggage that could affect its progress.

Mary Schapiro, the first female to head the SEC, had to live down her imperfect record while at the helm of Financial Industry Regulatory Authority (FINRA), the brokerage industry’s self-regulatory agency. Two big scandals had broken on her watch—the Madoff Ponzi scheme and the alleged, $8 billion, R. Allen Stanford investment scam—and she had been faulted for not uncovering them. Gary Gensler, chairman of the CFTC, had opposed the regulation of the credit derivatives market ...

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