SEC Prepares To Issue Guidance On Corporate Fines
The US Securities and Exchange Commission (SEC) is hoping to publish guidance
by the end of the year outlining the criteria for imposing fines on corporate
wrongdoers, and the likely size of such penalties. In the days of former Chairman, William Donaldson, the Commission was reportedly
deeply divided over the record fines handed out for corporate governance failings,
an issue which the regulator's new chief, Christopher Cox is seeking to address. Speaking to the Business Week news service last week regarding the new guidelines,
Cox explained that: "There needs to be a very clear understanding of what the law requires
of us and, among Americans, what the law requires of them." However, reaching agreement on the matter is not expected to be easy. In the four closed-door meetings that have so far taken place, the Commission
has been split, with Republican Commissioners Paul Atkins and Cynthia Glassman
suggesting that imposing large fines on companies is counterproductive and that
the penalties should be focused on the executives who engineer the wrongdoing,
whilst Democrat Commissioner Roel Campos argues that large fines can be an effective
deterrent for wrongdoers. .
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