The US Securities and Exchange Commission: Working Smarter to Protect Investors and Ensure Efficient Markets

The Securities and Exchange Commission (SEC) was established under the US Securities Exchange Act of 1934 to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. In 2008, the SEC’s credibility was undermined when Bernard Madoff was arrested for robbing investors of $18 billion, representing the largest financial fraud in United States history. Weeks later, Mary Schapiro was appointed Chairman of the SEC; she was tasked with reinvigorating the agency and preparing it to take a lead role in reestablishing the integrity of the US financial services industry. From 2009 through 2012, Schapiro and her leadership team transformed the SEC’s core business processes, redesigned its organizational structure, hired new talent, established a culture of collaboration and transparency, and invested in modern technology. As a result, people across the agency began to work smarter—focusing on meaningful pursuits and making evidence-based decisions while armed with data and analytical tools. This case describes the SEC’s “working smarter” journey, and how the SEC intends to avert Madoff-type deceptions in the future.