The New Sheriffs of Wall Street

They skipped the partner track. They were underestimated by men. But the women who will regulate banking and finance for the next generation — Mary Schapiro, Sheila Bair and Elizabeth Warren — are not accustomed to taking no for an answer

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Michele Asselin for TIME

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The Turnaround Artist
Taped to the door of Mary Schapiro's office on the top floor of the SEC building is a piece of paper that reads, "How Does It Help Investors?" The maxim is meant not just as a lodestar for her agency but also as a repudiation of its recent past.

Schapiro was appointed to a first stint at the SEC in 1988, to fill what she said was called its "woman's seat." When President Obama picked her as the commission's chair in 2009, the agency was on its heels, stung for missing Bernie Madoff's Ponzi scheme and embarrassed by news reports that senior officials had used their work computers to view pornography. "The world really changed around the SEC, and I think the SEC didn't change with it," she says now, somewhat diplomatically. When she arrived at the agency, she was far more direct. "I've been called the Muammar Gaddafi of regulation," she told a reporter.

In her first year, Schapiro has added staff, restarted an in-house think tank to mine data for systemic risk and initiated rulemaking to rein in arcane trading practices that had given large institutions advantages over individual investors. She did away with a rule that forced SEC investigators to get commission approval before proceeding with a case or negotiating settlements. Enforcement actions are up, as are fine collections, and in April she cast the deciding vote to bring charges against Goldman Sachs for alleged fraud — charges that have shaken the entire banking industry. To top off her first year, she also put out word to her staff: Anyone caught viewing porn at work would be "subject to termination." "You could call her a turnaround artist," says Elisse Walter, an SEC commissioner.

Born to a college librarian and an antiques dealer near Long Island's Great South Bay, Schapiro played three sports in high school and several more in college. Her academic focus at Franklin and Marshall College was the native culture of the Trobriand Islands off New Guinea. She started working as a lawyer at the Commodity Futures Trading Commission in 1980, just after the Hunt brothers had illegally tried to corner the global silver market. "I think it was the anthropologist in me that was fascinated by this idea that people thought they could control a world commodity," she recalls. "Here they were, causing extraordinary pain to lots of people."

In 1994, Robert Rubin, then President Clinton's economic czar, tapped Schapiro, then nine months pregnant, to take over the CFTC. Upon arriving, Schapiro promptly refused a request by Chicago traders to be exempted from federal regulations. Tom Donovan, then the head of the Chicago Board of Trade, struck back, announcing that he would not be "intimidated by some blond, 5-ft. 2-in. girl." Schapiro responded by telling a reporter, "I'm 5 ft. 5."

Sisterhood Is Powerful
In the mid-1990s, Schapiro was invited to Chicago to address a convention of commodities-and-derivatives traders. "Talk about a male-dominated industry," she recalls. "And standing up there, giving my maiden speech and searching the audience for just one or two women I could focus on, thinking there would be some empathy for the position I was in." The face she lighted on belonged to Bair, a fellow regulator and colleague who knew exactly what she was going through. "My favorite is when you are at a meeting and you say something, and it's just dead silence," Bair says. "Fifteen minutes later, some guy says exactly the same thing, and everybody is nodding their head."

All three women know these experiences, but they all have also noticed something else. "There are lots more women at the table now," Schapiro says. And the women have learned how to work together better. Around Washington, women call this "amplification," the extra juice that comes when powerful figures join forces to speak up against entrenched interests. As chairs of their commissions, both Bair and Schapiro have independently consulted with Warren in recent months for advice on consumer rights. They have largely spoken with a united voice on financial reform, and when they gathered in late April for a TIME photo shoot, they promptly huddled to strategize on arguments to head off bank lobbyists' efforts against the new derivatives regulation moving through the Senate. The measure, believed to be dead a few months ago, now looks likely to pass by the end of the month. The only question is whether it will have the teeth to prevent a repeat of the crisis of 2008. "Do you know how many little changes could be made in that statute to just cut the legs out from underneath it?" Warren asks.

There is something else that all three share, an experience that can happen on the street, in line at the airport, in the supermarket. Women will approach them, even though they don't have famous faces, to shake their hands, to thank them, to ask if they will take a photograph with young daughters or sons. "That's a powerful thing," says Schapiro. "I've had people lean out of car windows and yell, 'Keep it up, Elizabeth,' " adds Warren. "I can't go out in my sweats anymore," says Bair.

Those chance encounters mean that Tim Geithner isn't alone in asking the question, What if women, not men, were the real powers on Wall Street? With the arrival of Bair, Schapiro and Warren, we are finally getting an answer.

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