Mary Miller, a Treasury Department official seen as the expected pick for the next head of the SEC, dropped out of contention yesterday, leaving an unclear path forward. Elisse Walter, who was designated as the new chair, replacing the departing Mary Schapiro, is seen as a stopgap pick. But her elevation to the top slot means that the SEC is one member down on its commission, with a 2-2 split between Democrats and Republicans. This will likely stall out almost all its important initiatives in the coming months until a new commissioner gets nominated and confirmed, and unless the Administration wants to give credence to the theory that they want to tie the bureaucratic hands of a key financial regulator, they need to nominate someone soon.
Speculation has focused not on a career prosecutor or someone with a record of tough oversight of the financial industry, but Sallie Krawcheck, “a longtime Wall Street executive” from Bank of America, and Robert Khuzami, the current head of enforcement.