Schumer to introduce legislation that would allow SEC to keep fines

Sep 8, 2009 @ 4:42 pm

By Sara Hansard

Sen. Charles Schumer, D-N.Y., will propose legislation that would allow the SEC to keep any fines it levies against wrongdoers and to pocket the $1.5 billion in transaction and other fees it is expected to collect for the fiscal year that begins Oct. 1.

Mr. Schumer hopes the proposal, which he expects to put forth any day now, will be included as part of the financial services reform legislation being debated by Congress. The proposal is intended to bolster the Securities and Exchange Commission’s ability to police the securities markets.

“We look forward to reviewing Senator Schumer’s legislative proposal and considering how it would build upon the many reforms we are already undertaking to revitalize the agency,” said SEC spokesman John Nester.

Still, many believe that allowing the SEC to keep the fines would represent a conflict of interest for the agency.

Even SEC Commissioner Luis Aguilar is leery of the idea.

“I would not want any [amount of the penalties] to be part of the self-funding,” said Mr. Aguilar, who supports instead the notion of allowing the SEC to keep the statutory fees it collects. “There’s too great a [potential for] conflict.”

For the fiscal year that ended Sept. 30, 2008, the SEC collected $774 million in ill-gotten gains were disgorged and another $256 million in penalties.

The administration has called for a budget for the SEC of just more than $1 billion for fiscal 2010.

Mr. Schumer plans to introduce his legislation “in the coming days,” his spokesman, Brian Fallon said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What are advisers clamoring for in the tech space?

Advisers have made their needs known, and fintech firms are listening. Hear from the experts at Fuse what they're doing to help advisers build and scale practices.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry

After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

Top 10 financial firms ranked by investor satisfaction

Find out which firm took the top slot for overall investor satisfaction for the second year in a row.

What not to say to clients when the markets drop

Here's what advisers should steer clear of saying the next time stocks turn downward.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print