SEC official Elisse Walter chosen to lead agency

Under Schapiro, the SEC reached its largest settlement ever with a financial institution. Goldman Sachs & Co. agreed in July 2010 to pay $550 million to settle civil fraud charges that it misled investors about mortgage securities before the housing market collapsed in 2007. Similar settlements followed with Citigroup Inc., JPMorgan Chase & Co. and others.

The Goldman case came to symbolize a lingering critique of Schapiro's tenure: No senior executives were singled out. The penalty amounted to roughly two weeks of earnings at Goldman. And Goldman was allowed to settle the charges without admitting or denying any wrongdoing, as were other large banks that faced similar charges.

Among the leading critics was U.S. District Judge Jed Rakoff, who questioned how the SEC could allow an institution to settle serious securities fraud without any admission or denial of guilt. Rakoff later threw out a $285 million deal with Citigroup because of that aspect of the deal.

Lawmakers and experts say Schapiro made the SEC more efficient, and they note that she fought for increased funding needed to enforce new rules enacted after the crisis. She often clashed with Republican lawmakers who had opposed the 2010 financial overhaul law and wanted to cut the SEC's budget.

Schapiro also faced criticism over a key decision she made in response to the Madoff scandal. Madoff had been arrested a month before Schapiro took over at the SEC in January 2009.

Schapiro allowed her general counsel at the time, David Becker, to help craft the SEC's policy for compensating victims. It was later discovered that Becker had inherited money his mother had made as a Madoff investor. Schapiro acknowledged in 2011 that she was wrong to have allowed Becker to play a key role in setting the policy.

The SEC's inspector general concluded in a report that Becker participated "personally and substantially" in an issue in which he had had a financial interest. Some lawmakers complained that the affair further eroded the public's trust in the SEC.

Cox, the Duke professor, said that after a strong first two years, the SEC under Schapiro became less effective.

"The wind was really taken out of (Schapiro's) sails" by the political fallout from the Becker episode, Cox said. "I don't think she really got her legs back under her after that."

For example, Cox said Schapiro should have fought harder against legislation enacted in March that makes it easier for small start-ups to raise capital without having to comply immediately with SEC reporting rules.

Critics say the law went too far in removing SEC oversight, and might open the door to corporate scandals or to the sorts of deceptions that contributed to the financial crisis.

Associated Press writers Jim Kuhnhenn and Christopher S. Rugaber contributed to this report.