Schapiro will step down Dec. 14.
Washington (CNNMoney) — President Obama has tapped U.S. Securities and Exchange Commissioner Elisse Walter to replace Mary Schapiro as chair of the agency.
Schapiro, 57, announced Monday that she will be stepping down from her post on Dec. 14.
Schapiro oversaw the regulation of the financial securities industry during a tumultuous time. She took the top job in January 2009 when the agency was reeling from criticism that it didn't do enough to spot and prevent events that led to the financial crisis.
"When Mary agreed to serve nearly four years ago, she was fully aware of the difficulties facing the SEC and our economy as a whole," President Obama said in a statement.
Obama said that Walter would step up to be chair upon Schapiro's departure. Walter, a Democrat, was first appointed to the commission by President George W. Bush in 2008. She briefly served as acting chair. Walter won't need confirmation from the Senate until December 2013, since she's already on the commission, according to the SEC.
Walter also worked as a top lobbyist for the Financial Industry Regulatory Authority, while Schapiro was CEO of that self-regulatory group.
"I'm confident that Elisse's years of experience will serve her well in her new position, and I'm grateful she has agreed to help lead the agency," he said.
The SEC has been roundly criticized for missing the multi-billion dollar Bernard Madoff ponzi scheme, even after it was warned about the scam from a whistleblower. The agency was also under fire for its lax supervision of financial firms like Lehman Brothers, which filed for bankruptcy during the height of the financial crisis in 2008.
In recent years, however, the agency under Schapiro has beefed up its enforcements against financial firms that have broken rules.
Under her watch, the U.S. Securities and Exchange Commission won a $550 million penalty against Goldman Sachs, the largest in SEC history, to settle charges the bank defrauded investors in selling securities tied to subprime mortgages.
The agency also settled with Bank of America for $150 million over charges that the bank didn't tell shareholders about bonuses paid to Merrill Lynch bankers or losses that led to a second government bailout. The penalty was negotiated up from an original settlement of $33 million after U.S. District Court Judge Jed Rakoff threw out the case.
Schapiro's departure has been expected in financial circles. Schapiro made $163,000 in the post, far less than her $2.75 million salary running FINRA.
An independent, Chairman Schapiro served as a SEC commissioner from 1988 to 1994, appointed by Republican Presidents Ronald Reagan and George H.W. Bush. President Clinton appointed her as chairman of the Commodity Futures Trading Commission, where she served until 1996.