Wednesday, January 14, 2009
SEC Commissioner Luis A. Auilar gave a speech, Empowering the Markets Watchdog to Effect Real Results, at the North American Securities Administrators Association's Winter Enforcement Conference on January 10, 2009. He addressed short-term internal fixes the SEC can make to improve its tarnished image as an effective law enforcement agency and also proposed some legislative reforms. As to the first, he stated:
As many of you know, I became an SEC commissioner just over five months ago. In my first speech after being appointed, I expressed concern with the potential drop off in large investigations and the dramatic decline in the past few years in the amount of penalties that the Commission seeks and collects. Recently, it has been nearly impossible to turn on a TV or pick up a newspaper without seeing headlines criticizing the SEC and questioning whether the SEC is committed to aggressive and robust enforcement. In my experience, this is not an accurate perception of the dedication of the SEC's staff. However, there is no question that the time is now for the SEC to answer its critics by demonstrating its commitment to be the markets watchdog. To effectively do this — the SEC should undertake some internal shifts in policy and practice.
In my view, in terms of immediate actions, the SEC should:
eliminate its penalty pre-authorization pilot program;
rebuild and empower its enforcement staff; and
concentrate its resources on cases with greater reach into the market.