House bill seeks to hike SEC’s powers

Jul 9, 2008 @ 10:46 am

By Neil Roland

Legislation to expand the Securities and Exchange Commission’s enforcement authority is due to be considered by a House subcommittee tomorrow, according to Crain's Financial Week.

In an odd bit of timing, the bill is being considered in the same week that outgoing SEC commissioner Paul Atkins called for an independent panel to consider trimming the agency’s enforcement authority.

The legislation is slated be introduced by House Capital Markets subcommittee chairman Paul Kanjorski, D-Pa.

A copy of the draft to be considered by the panel reveals few new ideas. Indeed, some of the bill’s provisions have previously been requested by SEC officials in appearances before Congress.

For example, the legislation would require the SEC chairman (currently Christopher Cox) to testify annually before Congress about agency efforts to get publicly traded companies “to provide more accurate and clearer financial information to investors,” according to the draft. Legislation to require such testimony passed the House last year.

Nevertheless, the proposal, if passed, would substantially increase the commission’s existing powers.

For one thing, the bill would let the SEC seek fines in administrative proceedings, not just federal court.

What’s more, the proposal would grant the agency the right to bar brokers, investment advisers and municipal bond dealers that violate federal law from entering other sectors of the securities industry. In addition, the SEC would get expanded subpoena authority.

“Some of these provisions, like the one on fines, are pretty aggressive,” Georgetown University law professor Donald Langevoort told Financial Week.

“They run into crosswinds from some business groups that are seeking to limit the SEC’s authority as part of an effort to expand companies’ international competitiveness.”

Mr. Langevoort said the bill would likely be blocked by legislators arguing that many of these issues are best addressed in a broader consideration of the SEC’s role in a global economy.

Opponents of the bill might find an ally in Mr. Atkins, a Republican commissioner due to leave the SEC at the end of the month.

In an article published yesterday, Mr. Atkins wrote that the securities regulator had been overly aggressive in its investigations and prosecutions.

He called for formation of an independent panel to consider whether the agency’s fines and penalties are having the desired effect.

Mr. Atkins, a self-described libertarian, did not immediately respond to a request for comment on the legislation.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

How NextGen talent is impacting financial services

Nextgen talent brings a diverse perspective and unique skills to the industry. Find out why two Utah Valley University students are so excited to make a difference.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print