WASHINGTON The new head of the Securities and Exchange Commission took steps on Friday to reinvigorate the agency's policing of Wall Street, two days after a congressional hearing chastised SEC investigators for failing to uncover Bernard Madoff's alleged $50 billion fraud.
"I like to tell the staff we are going to act like our hair is on fire," SEC Chairman Mary Schapiro told reporters after an appearance at a conference.
Schapiro halted a Bush administration program that made it harder for SEC lawyers to negotiate settlements with companies and vowed to cut red tape for investigators probing possible wrongdoing.
The now-abandoned pilot program requiring SEC investigators to seek commission approval for settlements "discouraged staff from arguing for a penalty," Schapiro told a Practicing Law Institute conference in Washington.
Schapiro, who promised Congress during her own confirmation hearing that she would take the handcuffs off the SEC's enforcement division, took action on Friday to speed up the process for approving formal orders.
Schapiro said she was looking for ways to improve how the agency handles tips and whistleblower complaints.
The agency was blasted by members of a House Financial Services subcommittee earlier this week for ignoring Wall Street tipster Harry Markopolos, who repeatedly urged SEC officials for nine years to take a closer look at Madoff's business.
The SEC did not uncover Madoff's alleged fraud until his sons told authorities he had confessed to running a giant Ponzi scheme, authorities said.
After a year in which the financial sector was brought to its knees and U.S. markets lost trillions of dollars, Schapiro said the SEC must play a critical role in reviving the markets and bolstering investor confidence.
"We have to have a laser-like focus right now on investor protection," Schapiro said.
The new chairman said she wanted to give shareholders a greater say about corporate boards, and plans to create an investor adviser committee.
"I would like to have a mechanism to have regular contact with the investor community so we can hear the issues they are concerned about," she said.
(Reporting by Rachelle Younglai; editing by Jeffrey Benkoe)