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Cmte Financial Services (R)
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Subcommittee Conducts Important SEC Oversight


Washington, Apr 21 -

WASHINGTON – The Financial Services Capital Markets and Government Sponsored Enterprises Subcommittee held a hearing today with top officials of the Securities and Exchange Commission (SEC) to conduct oversight of their offices and divisions.

“During much of the time when Congress has been accused of starving the SEC of the funds it needs to fulfill its mission, its budget has actually quadrupled in the last 15 years. It would be one thing if this four-fold increase in funding coincided with an agency that has become four times as effective. Instead, we are likely to look back at this period as a time when the SEC missed some of the greatest frauds in history, was ill-prepared for the financial crisis of 2008, failed to properly incorporate economic analysis into rulemakings, and, more recently, has often times been complicit in advancing the priorities of special interests,” said Subcommittee Chairman Scott Garrett (R-NJ).

Key Takeaways from the Hearing:

  • The SEC must be data driven in promulgating its rules, and needs to conduct robust cost-benefit analysis.
  • The SEC has sufficient funds to perform its statutory obligations. In 2000, the SEC’s operating budget was about $369 million. In 2016, the SEC’s budget authority is more than $1.6 billion.
  • The SEC continues to squander its resources on rulemakings that harm U.S. companies and investors rather than prioritizing activities that fulfill the agency’s statutory mission to protect investors; ensure fair, orderly, and efficient markets; and facilitate capital formation.
  • The SEC must reassert itself as the primary regulator of U.S. capital markets to fulfill its statutory mission and counter growing intervention by the Federal Reserve and the Financial Stability Oversight Council (FSOC) in these markets.

The following witnesses testified at today’s hearing:

Thomas Butler, Director of the SEC’s Office of Credit Ratings

Mark Flannery, Director of the SEC’s Division of Economic and Risk Analysis

Sean McKessy, Chief of the SEC’s Office of the Whistleblower

Marc Wyatt, Director of the SEC’s Office of Compliance, Inspections, and Examinations