The SEC, fresh off an impressively long stretch of missing virtually everything they were supposed to catch, is ramping up its efforts to become a remotely credible regulator. After being publicly humiliated by the widespread ineptitude of missing the Madoff fraud as well as its own insider trading scandal, the new SEC Chairman, Mary Schapiro, is determined to create a new kind of SEC.

I wanted to be very clear almost from my first day -- not just with words, which are pretty easy to string together, but with actions -- that this is a new SEC that is moving in a decidedly different direction and at a decidedly different pace,

Given the rhetoric coming out of Washington regarding evil speculators, it should come as no surprise that hedge funds, derivatives, and short-selling are three of the primary targets in the SEC's cross hairs. Schapiro clearly has a huge uphill battle ahead of her. She is head of an organization where people still take issue with categorizing the Madoff miss as a failure. Effective regulation can help markets avoid the meltdowns we saw last year, but the risk of the SEC becoming over zealous to restore its image looms large.
SEC Chief Strives To Rebuild Regulator [Washington Post]