Senate bill aims for higher SEC enforcement penalties

The bi-partisan legislation would permit the regulator to pursue larger fines through its administrative process

Mar 30, 2017 @ 5:33 pm

By Mark Schoeff Jr.

The Securities and Exchange Commission could substantially increase enforcement sanctions under bipartisan legislation introduced on Thursday.

The bill would allow the SEC to impose a maximum $1 million penalty on individuals per violation for the most serious offenses and a maximum $10 million per violation on financial firms. Those levels would be an increase from the current $181,071 for individuals and $905,353 for firms. The measure also would give the SEC latitude to triple the cap for repeat offenders.

Currently, the SEC can levy a penalty equal to the gross amount of ill-gotten gains if an enforcement case goes to federal court. The legislation would permit the SEC to pursue the larger fines through its administrative process.

The legislation is designed to link the size of the penalty to the investor harm caused by fraud, according to a statement from the bill's authors, Sens. Jack Reed, D-R.I., Chuck Grassley, R-Ia., Patrick Leahy, D-Vt. and Heidi Heitkamp, D-N.D.

Similar legislation has been introduced in past sessions of Congress but was not passed into law.

"Investors deserve real protection, and the law needs to change to ensure the punishment fits the crime," Mr. Reed, a member of the Senate Banking Committee, said in a statement. "This bill gives the SEC more tools to demand meaningful accountability from Wall Street."

A Republican author said that higher fines are needed to protect investors.

"If a fine is just decimal dust for a Wall Street firm, that's not a deterrent," said Mr. Grassley, chairman of the Senate Judiciary Committee. "It's just the cost of doing business. A penalty should mean something, and it should get the recidivists' attention."

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Why a sabbatical is the perk advisory firms can’t overlook

Financial advice firms offering this benefit praise the impact its had on their businesses.

Latest news & opinion

Finra anticipates oversight role for SEC advice rule

CEO Robert Cook says one area for examination could be the proposed requirement that brokers act in the best interests of their clients.

IBDs with the most CFPs

Here are the 10 independent broker-dealers that employ the most certified financial planner professionals.

Why we must create a more diverse and sustainable financial planning profession

CEO explains how, why a firm should commit to conscious inclusion.

Pope Francis wants financial advisers to work like fiduciaries

Vatican bulletin admonishes advisers who act against the best interests of their clients.

Wells Fargo sees slowdown in advisers exiting this year

The 2016 banking scandal and public relations fiasco had alienated some of the firm's advisers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print