Cox Applauds House Passage Of SEC Enforcement Bill

by Mike Godfrey, Tax-News.com, Washington

12 September 2008

Securities and Exchange Commission (SEC) Chairman Christopher Cox has this week applauded the US House of Representatives for passing legislation that would provide new investor protection measures and further bolster the SEC’s enforcement program.

The current program is already recognized as the world’s most effective and successful in policing the markets and protecting investors.

The Securities Act of 2008, sponsored by Rep. Paul Kanjorski (D-PA) with bipartisan support including House Financial Services Committee Chairman Barney Frank and Ranking Member Spencer Bachus, incorporates recommendations made by the SEC to Congress to enhance the securities laws and give the SEC’s Enforcement Division increased flexibility and resources to pursue securities fraudsters and other wrongdoers in the markets.

“The House of Representatives today passed measures that the SEC requested to improve the securities laws and provide additional tools for the SEC’s enforcement program that already is seen as the gold standard around the world. Policing the markets and keeping investors’ money safe has never been more important, and so this legislation comes at a critical time,” explained Chairman Cox last Friday, adding:

“I would like to personally commend and thank Congressman Kanjorski, Chairman Frank, and Ranking Member Bachus for their outstanding leadership in shepherding this important legislation through Congress on behalf of America’s investors.”

Says the SEC: The new tools the legislation provides will be a boon to the SEC enforcement staff, which under Chairman Cox has increased to 34% of the SEC workforce from 32% in 2005 and 29% in the 1990s. This investment in investor protection already is paying significant dividends.

In the past three years, the SEC has achieved the greatest number of corporate penalties in any year in SEC history, the second highest-ever number of enforcement actions brought in a single year, and the second highest-ever single-year total for penalties and disgorgements.

The Securities Act of 2008 would help further strengthen this record of accomplishment through the elimination of unnecessary duplication and extraneous responsibilities for SEC enforcement staff in their pursuit of wrongdoers, by giving the SEC authority to obtain financial penalties from wrongdoers in administrative proceedings without needing to file a separate civil action in federal court.

Supporting the SEC’s enforcement efforts, as this legislation does, directly benefits injured investors. During the past month alone, the SEC’s Division of Enforcement has announced several landmark preliminary settlements that would represent the largest settlements and returns of customer money in SEC history.

These resolutions of SEC enforcement investigations into auction-rate securities abuses will enable individual investors to receive more than USD28.4bn of their money back, even as the SEC investigations into individual wrongdoing continue.

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