Cochran questions SEC’s reform efforts
WASHINGTON — Sen. Thad Cochran (R-Miss.) is questioning efforts by the Securities and Exchange Commission (SEC) to correct serious problems within the agency that have been linked to financial scandals, such as those by Bernie Madoff and Stanford Financial which hurt investors and the U.S. economy.
Cochran, vice chairman of the Senate Appropriations Committee, took part in a Senate Financial Services and General Government Appropriations Subcommittee hearing to review the FY2011 budget request for the SEC and Commodity Futures Trading Commission.
The senator raised several issues regarding SEC activities in light of reports and audits outlining performance deficiencies within the agency that contributed to scandals like the Stanford Financial fraud. That scheme cost Mississippians millions of dollars in losses.
“It is heartbreaking to visit with some of these people who are victims of someone else’s greed and corruption. We want to know what needs to be done to keep this from happening again,” Cochran said.
SEC chairman Mary Shapiro testified that the commission is working to implement 69 recommendations issued by the inspector general to correct managerial, cultural and performance-based inadequacies within the agency.
Cochran submitted questions to Shapiro regarding the Stanford Financial fraud case, including seeking an explanation for the 12-year lapse in which the SEC did not take action against Stanford, despite repeated requests by SEC examiners that enforcement actions be taken. He also questioned what the SEC is doing to try to help compensate victims of the Stanford Financial fraud who, unlike the victims of the Bernie Madoff ponzi scheme, are not currently receiving Securities Investor Protection Corporation (SIPC) compensation for their losses.
Due to the problems within the SEC, Cochran has questioned the wisdom of a self-funding proposal supported by the SEC that is included in the financial regulatory reform bill (S.3217) now before the Senate. The measure would transform the SEC into a self-funded organization, allowing it to directly spend fees that it recovers. These fees, expected to be about $1.7 billion in FY2011, greatly exceed the $1.1 billion appropriated for FY2010 and the $1.2 billion recommended in the President’s FY2011 budget request.
“Self-funding would effectively exempt the SEC from congressional oversight. Several recent audits and reports have called into question the commission’s ability to perform its responsibilities. The reports indicate that these problems were caused by mismanagement at the SEC and not by any funding shortages.
“I think Congress should demand even more accountability of the SEC. The commission hasn’t demonstrated to me that it deserves to be exempt from oversight of its budget.”
Overall, the Obama administration’s FY2011 budget request seeks $1.2 billion for the SEC, which is $139 million over its FY2010 budget. The proposed increase would be used to enhance market surveillance and enforcement efforts and increase the full-time employee level by 380 positions next year.
For the CFTC, the budget request recommends $261 million in FY2011, a $47.2-million increase over FY2010. The proposed funding increase would be to maintain operations and continue IT modernization.
To sign up for Mississippi Business Daily Updates, click here.
One Response to “Cochran questions SEC’s reform efforts”
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- David Duval, former British Open winner, joins Sanderson Farms field
- Court rules against Greenwood councilwoman; must give up office
- NEW IN MADISON COUNTY — Mississippi Bio-Medical Business Collaboratory to be introduced Friday
- Alcorn president launches new customer service task force
- Cochran continues to reach out to African American voters
- Turner Grain’s bankruptcy will help consolidate lawsuits alleging breach of contract
- ‘Little Boogaloo’ Eden Brent happy singing the blues
- Hole-by-hole look at Sanderson Farms Championship course at CCJ
- Senators write letter over Waters of the United States proposal