11/26/2012 01:33 pm ET Updated Jan 26, 2013

Mary Schapiro's SEC Legacy: Not A Total Failure

Mary Schapiro's legacy as head of the Securities and Exchange Commission will be that the agency did not become entirely useless on her watch -- although that is maybe the best you can say about it.

After a tenure of nearly four years, Schapiro is stepping down next month to spend more time with the inside of her eyelids, the SEC announced on Monday. Her replacement for the foreseeable future will be SEC Commissioner Elisse Walter, the New York Times reports.

The quick consensus among SEC watchers seems to be that Walter is very much cut from the same cloth as Schapiro, so it's worth taking a minute to assess what kind of SEC Chairman Schapiro has been: After all, we may well be getting more of the same for the foreseeable future.

In sending her off, the SEC cobbled together a very long list of Schapiro's accomplishments at the SEC, an effort that Kevin Roose at New York magazine appropriately described as "slightly defensive and weird."

But let's be fair, and also balanced: Schapiro's tenure was not a complete failure. There were hits as well as misses. Ultimately, though, the misses far, far outweighed the hits.

Hit: Saving The SEC: Before Schapiro took office, there was talk on Washington that maybe the SEC, which had completely failed to notice Bernie Madoff openly ripping people off for years, should be abolished. Schapiro helped end that talk by showing that the agency could occasionally still take stabs at setting rules and enforcing laws on Wall Street.

Hit: Insider Trading: The SEC has been a partner with the Justice Department in an aggressive insider-trading dragnet that has already put away many people, including former Goldman Sachs director Rajat Gupta, and is still ongoing.

Aaaand, that's about it for major accomplishments, as far as I can see. The misses, on the other hand, are many, and damning:

Miss: Slow Rule-Making: The deadline for the SEC to write new rules arising from the Dodd-Frank financial-reform law passed long, long ago -- Tax Day 2011, to be exact -- and the majority are still not written. This is not entirely Schapiro's fault: The agency has been hampered by a need to analyze the costs and benefits of each new rule, and the law itself has been hopelessly complicated by bank lobbying. But some of the blame for the prolonged failure to nail down a Volcker Rule or to reform money-market funds, two name just two, has to be Schapiro's.

Miss: No Individuals Were Harmed: The SEC has charged no high-ranking Wall Street executives for their misdeeds ahead of the financial crisis. Perhaps the best-known individual the SEC did target, former Countrywide chief Angelo Mozilo, settled by paying a fine that was just a fraction of his net worth and avoided criminal prosecution.

Miss: Multiple Wrist Slaps: Mozilo wasn't the only SEC target to get off with a light fine. The agency often touts its $550 million fine of Goldman Sachs for cooking up subprime-stuffed CDOs, but that fine was a rounding error for Goldman and far lower than the money Goldman made in the years ahead of the crisis. One SEC settlement, with Bank of America, over the bank's disclosures about its Merrill Lynch merger, was slapped down by U.S. District Judge Jed Rakoff as being embarrassingly lenient.

Miss: Letting The Robots Win: The agency has been slow to adapt to a Wall Street takeover by high-speed-trading robots, who now control more than half of all stock trading in the U.S. And it may never catch up.

Miss: Computer Troubles: Speaking of computers, a recent internal investigation of the SEC's Trading and Markets Division found that its employees were inept at basic computer security, leaving themselves vulnerable to hackers. SEC employees are apparently no longer spending their entire days surfing for porn, as they were doing when Schapiro took office, so that's an improvement.

Correction: An earlier version of this post incorrectly identified Rajat Gupta as a former partner of Goldman Sachs. He is a former director.