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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Tuesday, June 2, 2009

Schapiro Testifies Before Senate

SEC Chairman Schapiro testified today before the Senate Subcommittee on Financial Services and General Government on the Commission's role in helping to address the financial crisis and reforms to improve investor protection and restore confidence in our markets.  A quick read of her prepared remarks does not reveal any new information or insights about the agency; the usual topics are addressed: the need to reinvigorate enforcement, strengthen examinations and oversight, improve transparency and investor protection, combat abusive short-selling, fill regulatory gaps, strengthen shareholder rights, improve money market and mutual fund regulation.  She also emphasized again how thinly stretched the agency's resources are, with the growth in the size and complexity of the securities markets.  She attached to her testimony an appendix SEC Staff Levels Have Not Kept Pace with Industry Growth.

Here are some excerpts from the concluding paragraphs of her testimony:

I came to the SEC to shape public policy in the interest of investors and to strengthen our enforcement program. The things I have described in this testimony are important to those efforts. But what I have also discovered in the past four months is that much attention needs to be focused on the internal operations of the agency, the processes that guide our work, the agency's infrastructure and how we are organized. I have been disappointed to find that in some areas of our internal operations, we fall short of what the taxpayer has a right to expect of us, and what our employees have a right to expect of a world class organization. I am committed to a complete review of areas large and small, including FOIA operations, call centers operations, records management, and others, to ensure that we meet the highest standards and that we are fully supporting the important work of our employees in these operations. Doing this will take time and energy and focus. To ensure that we do it well and thoroughly, I intend to bring in a Chief Operating Officer to manage the process. Federal agencies do not manage themselves; we must be actively engaged in that process everyday.

In one area, we have already made progress: we are moving to build an internal compliance program that is second to none. ...

I want to thank you for your continued strong support for the SEC and its critical mission. I believe the steps I have outlined here — strengthening our enforcement program, enhancing risk-based oversight of the markets and leveraging technology — are essential for restoring investors' confidence in both the SEC and in our nation's securities markets.

 

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