WASHINGTON (AP) – President elect-Barack Obama’s choice to head the Securities and Exchange Commission promised Thursday to revitalize the embattled agency’s enforcement efforts and bring other changes to bolster investor protection.

With investors’ confidence shaken in the financial crisis, Mary Schapiro said the SEC must be given the resources it needs to investigate and pursue “those who cut corners, cheat investors and break the law.”

Schapiro also pledged at her Senate confirmation hearing to “re-engage” the SEC with investors, and to deepen the agency’s commitment to investor protection, transparency and accountability. She is chief executive of the Financial Industry Regulatory Authority, the securities industry’s primary self-policing organization, and also has extensive experience as a government regulator in Washington.

Obama named Schapiro as the next SEC chairman at a time when the agency is being called on to help restore investor confidence shattered by the worst financial crisis in more than 70 years. The SEC also has faced heavy criticism over its failure to discover the $50 billion Ponzi scheme allegedly run by money manager Bernard Madoff – despite credible allegations against him being brought to the agency over the course of a decade.

Members of the Senate Banking Committee assailed the SEC, saying it contributed to the crisis with lax oversight of Wall Street and the financial markets, while calling for a thorough shake-up of the agency and its processes for detecting fraud.

“We need a much stronger regulator than we have had in the recent past,” said Sen. Charles Schumer, D-N.Y. “The only way the SEC is going to find crooks is if it’s actively looking for them.”

Schapiro said she would create a new centralized process within the SEC for improving communication among staff and taking in tips regarding fraudulent activity so vital information doesn’t slip through the cracks. And she pledged to improve the effectiveness of the agency’s process for inspecting brokerages, investment firms and other entities.

Complex instruments that are growing explosively and mostly unregulated, such as hedge funds and credit default swaps, “need to come under the regulatory umbrella,” Schapiro said. “We have to fill the gaps.”

Committee Chairman Sen. Christopher Dodd, D-Conn., asked Schapiro about the failure of FINRA, the organization she leads, to detect the alleged $50 billion Madoff fraud in its inspections of his brokerage operation.

Because the alleged fraud was carried out through Madoff’s investment business, and FINRA was empowered to inspect only the brokerage operation, it wasn’t possible for her organization to discover the violations, Schapiro said.

A primary lesson of the Madoff tragedy is the “stovepipe approach” that governs financial regulation, in which various regulatory agencies and government authorities oversee different parts of the market and sometimes compete with each other, doesn’t work, Schapiro said.

Other members of Obama’s prospective economic team also appeared at the hearing: Daniel Tarullo, a Georgetown University law professor in line to become a Federal Reserve governor, and three economics professors chosen for the White House Council of Economic Advisers: Designated CEA Chairman Christina Romer, Austan Goolsbee and Cecilia Rouse.

All four said they agreed with Fed Chairman Ben Bernanke’s recent statement that the second $350 billion installment of the federal bailout was critically needed, while recognizing that conditions need to be attached to banks’ and other financial companies’ use of the taxpayer money.

Obama’s selection of Schapiro last month met with mixed reactions from consumer and investor advocates. Some said her position within Wall Street’s regulatory apparatus made her less suitable than an outsider who would shake things up when change is sorely needed.

Noting the criticism, Sen. Robert Menendez, D-N.J., asked Schapiro whether she is a “safe and predictable” regulator.

She refuted the notion. “I’m absolutely ready to take this on,” Schapiro said, pledging to maintain “a laserlike focus on fraud and investor protection.”

Several groups, including the AFL-CIO labor federation and the National Investor Relations Institute, said Thursday that Schapiro was a good fit for the SEC job and urged the Senate to confirm her.

But the watchdog Project on Government Oversight said lawmakers gave her a free pass. Schapiro “is deeply invested in the failed regulatory apparatus that is at least partly to blame for the economic crisis we now face,” the group said in a statement.

On other issues, Schapiro expressed concern about the SEC’s plan to allow public companies to begin using international accounting standards for reporting financial results in a few years, a push toward acceptance of a single, global accounting standard.

“There’s a lot left to interpretation” as opposed to the now-required generally accepted accounting principles, she said.

Schapiro also suggested regulators needed to explore ways to diminish the market’s dependence on ratings by the big Wall Street credit rating agencies, and said the SEC’s Office of Risk Assessment should be revitalized and expanded.

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