The Schapiro Shift Continues

The NYT has a piece on Mary Schapiro's first weeks in office, generally written in a laudatory tone.  In general, we agree.  She has made some good appointments, taken off some of the restrictions on Enforcement, and indicated strong support for access and say on pay (although we await specific initiatives). 

One sentence, though, in the piece seemed overboard.  The article had this to say about the Agency:  "The once-proud agency was so dysfunctional that it had no way of distinguishing the meritless from the significant among the more than 700,000 whistle-blower and investor complaints it receives each year."  Distinguishing the wheat from the chaff among 700,000 investor complaints is a Herculean task for any agency, particularly since these complaints come from the competent and the crazy, from investors angry about possible fraud but also those who simply lost money. 

The staff investigate the complaints.  It may be true that there are more efficient ways to distinguish the good from the bad up front (something Mary Schapiro is working on) but attributing the failure to the Agency being "so dysfunctional" is unfortuante overkill.  Moreover, even when the Chairman develops a system, it will still have problems.  Short of fully investigating every single complaint (a resource issue), some good cases will be missed.