Schapiro approved as new SEC chairman - Mary Schapiro on hot seat post madoff fraud

Schapiro approved as new SEC chairman

WASHINGTON (Reuters) - Veteran securities regulator Mary Schapiro was approved by the U.S. Senate on Thursday to head the Securities and Exchange Commission where she will face the challenge of reinvigorating the agency criticized for missing one of the biggest investment frauds in history.

The lawmakers confirmed Schapiro as the 29th chairman of the SEC by a unanimous vote. Schapiro, who has spent more than two decades regulating financial markets, is now tasked with restoring investor confidence and policing Wall Street amid one of the worst financial crisis in decades.

At her confirmation hearing, the 53-year-old Schapiro promised to take the "handcuffs off" the SEC's enforcement division and go full force against anyone who violates investors' trust.

Schapiro, was chief executive of broker dealer watchdog Financial Industry Regulatory Authority, which has also come under fire for its role in financier's Bernard Madoff's alleged $50 billion fraud.

Congress is examining why regulators missed red flags about Madoff's business such as his use of a small unknown auditor and his ability to generate consistent returns in all types of market environments.

FINRA and Schapiro have said the broker dealer watchdog had no authority to look at Madoff's investment advisory business, where many suspect the fraud took place.

Congress will most likely push Schapiro to take a tougher stance on credit rating agencies, which assigned top ratings to mortgage-backed securities that later deteriorated.

Schapiro will be pressured to beef up supervision of loosely regulated financial products such as credit default swaps and hedge funds. She has already told Congress she will examine shareholders' ability to access the corporate board.

Schapiro is considered a regulator's regulator after being in charge of futures regulator the Commodity Futures Trading Commission and serving as an SEC commissioner.

(Reporting by Rachelle Younglai and Jeremy Pelofsky, editing by Carol Bishopric and Andre Grenon)

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