[ by Larry Goldfarb and Howard Haykin ]

Is the regulatory 2-step about to begin?  Even though the music has started, SEC Chairman Mary Schapiro "is dancing," the NYPost reports.  Speculation is circulating in D.C. that, not-so-distant future, Ms. Schapiro will announce that she'll step down from the SEC - perhaps as by year end. 

Here's what some are saying:

• Ms. Schapiro is leaving principally to recuperate from a recent illness.
• The illness is not considered "life threatening."
• She would not complete her current term of office that is due to expire June 2014.
• One name bandied about as a possible successor to Ms. Schapiro is Rick Ketchum, currently the Chairman & CEO of FINRA.  Ms. Schapiro was Ketchum's predecessor in that position, as well - when President Obama nominated Mary Schapiro to serve as Chairman of the SEC. 

"I suspect sometime after the election - ... regardless of how the election turns out – she will say, ‘I’m outta here'," said one former SEC official.  Chatter at the Agency grew louder ever since Chairman Schapiro left last Thursday for a leave  of absence – she's been working from home and is due back on Wednesday, 9/19.  An SEC official told The Post that Schapiro has been on medical leave since last Thursday and has been working from home as she recovers. 

That said, it's no secret in Washington, D.C. and throughout the U.S. - among securities industry professionals - that Ms. Schapiro has become a lightning rod for criticism on key regulatory reform.  So, it would not be at all surprising that such criticism would take a toll on Chairman Schapiro's health. 

Hot button issues, that propelled Ms. Schapiro to the "front and center" of debate and criticism, whichincluded:

• several of Ms. Schapiro's initiatives that were stymied by political gridlock between Democratic and Republican party leaders.
• Ms. Schapiro's inability to get rules adopted pertaining to money market reform.
  • Ms. Schapiro's 2-year quest to enact money market reforms ended without a vote by the SEC Commissioners on whether to adopt the newly proposed money market rules and regulations. 
  • Of all the issues, this probably was Ms. Schapiro top priority.  She believed change was needed, tried to convince others to see her point of view, and tirelessly met with politicians, SEC commissioners, industry leaders, and regulatory counterparts on the matter. 
  • Yet, in the end, Ms. Schapiro was unable to forge a compromise that would satisfy all the key players, forcing her to table the vote she that she had no chance of winning.
• Ms. Schapiro reportedly created bad blood within the SEC, which led some to question her ability to continue and lead the SEC. 

"She’s just frustrated," said Christopher Whalen of Tangent Capital Partners. 

A former Washington insider said that Schapiro, who's liked and respected by President Obama, would stay on until a replacement is named, should he win re-election.

For further details, go to:  [ NYPost, 9/18/12 ].