[ by Howard Haykin ] Offensive, Inappropriate Label Applied to Actions of Current SEC Chairman. Former SEC Chairman Arthur Levitt, 81, spoke out-of-line when he made untoward and inappropriate remarks about current SEC Chairman Mary Schapiro during an interview for Bloomberg radio.  Mr. Levitt, who said Ms. Schapiro's "abandonment" to impose tougher rules on money-market mutual funds is a "National Disgrace," is wrong if he thinks he is entitled to special dispensation, notwithstanding the fact that he's an octagenarian. Levitt further decried:

"There’s clearly a need to do something about money-market funds.  Everything else is marked to the market. This should be marked to the market in the interest of investors.  The fact that Mary Schapiro couldn’t get her three members of the commission to support this is really a national disgrace."

I, for one, am upset and offended by Mr. Levitt's language used with Bloomberg interviewers Tom Keene and Ken Prewitt.  Mr. Levitt currently sits on the advisory board of Promontory Financial Group LLC, a risk management and regulatory compliance consulting firm in Washington that focuses on the financial-services industry. Facts and Circumstances. Three SEC commissioners - a majority of the 5 votes at the SEC - informed Ms. Schapiro that they would not support any money market reforms at this time - despite the fact that Ms. Schapiro tried to champion this cause for the better part of 3 years.  With the SEC now currently tabling debate on the topic, it is possible that the fight over how to regulate the $2.6 trillion industry may be taken up by the Financial Stability Oversight Council. Of course, no one could be more upset than Mary Schapiro, who has worked to make money funds safer since the collapse of the $62.5 billion Reserve Primary Fund in September 2008.  She's argued that the funds’ stable share price encourages investors to flee at the first sign of trouble because it allows those who react quickly to sell their shares at $1 each even if the net asset value has dropped below that. SEC spokesman John Nester summed it up by saying Ms. Schapiro “agrees it's tragic and will work with other government agencies on money-market fund reforms to better protect investors and taxpayers.” Ms. Schapiro’s plan did have the support of Commissioner Elisse Walter.  But Republican Commissioners Troy Paredes and Daniel Gallagher opposed Schapiro's plan, while Democratic Commissioner signaled that the SEC lacked bullet-proof responses to several stated concerns. Needless to say, the sponsors of money-market funds also the biggest opponents of this regulation.  According to Mr. Levitt, that would include companies like Goldman Sachs and Morgan Stanley, that have their own money-market funds. For further details, go to: [Bloomberg, 8/23/12].