Her lawyers insist the accusations have no merit and the misstatement she is alleged to have made was no big deal. But Mary Schapiro´s alleged improprieties during the merger between the New York Stock Exchange and the National Association of Securities Dealers has direct bearing on her possible tenure at the Securities and Exchange Commission. The Obama administration´s pick for SEC chairman will likely need to better explain herself at her nomination hearing this week.

Ms. Schapiro orchestrated the merger between NASD and the NYSE that created the Financial Industry Regulatory Authority-of which she then became chief executive. According to this New York Times story, a lawsuit filed by a group of NASD member firms accuses Ms. Schapiro of telling them incorrectly that Internal Revenue Service code dictated that they could only be paid $35,000 a piece, and no more, as part of the merger deal. The IRS did not rule to that effect, however, until three months after the NASD members had already agreed to the merger.

If she becomes chairman of the SEC, Ms. Schapiro could end up overseeing another merger, this one between the SEC and the Commodity Futures Trading Commission. It would behoove members of the Senate Banking Committee who are holding a nomination hearing for Ms. Schapiro on Thursday to ask her how she would handle a possible combination of the two regulators-not just after it was complete but during all proceedings.