BANKS »» REGULATION »» SECURITIES AND EXCHANGE COMMISSION »» May 22, 2023

The Securities and Exchange Commission (SEC) was created during the Great Depression to protect the interests of investors. Its 4,000 employees oversee nearly 12,000 investment counselors, 10,000 mutual funds and 4,500 brokerage firms. Many people think the SEC has not been very effective in doing its job of making rules, preventing fraud and maintaining fair and orderly markets. The SEC has been plagued by problems and mistakes such as conflict-of-interest questions in its general counsel’s office, and its record of almost never taking violators to court. In defense of its record, the SEC says it annually reviews many thousands of financial statements and corporate disclosures each year. It claims its lawyers go up against corporations that spend more on lawyer’s fees than the SEC’s entire annual budget. Critics claim the small penalties the SEC levies against companies are not an effective deterrent and that criminal convictions against the executives of these companies are extremely rare. They also say the often-close relationships this regulatory agency shares with the companies it regulates hinder effective enforcement. Proposed Legislation: Reintroduction of S.286 Stronger Enforcement of Civil Penalties Act of 2013 Prospective Sponsor: Sen. Jack Reed (RI) I oppose reforming current Securities and Exchange Commission enforcement policy and wish to donate resources to the campaign committee of Leader Charles Schumer (NY). I support: 1.) Stronger SEC enforcement measures including increasing the money penalties in administrative and civil actions involving securities laws violations. 2.) Prescribing a fourth-tier penalty of triple monetary penalties for noncompliance with certain enforcement actions if the violator, within the five-year period preceding the prohibited act, was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any SEC action alleging fraud by such violator. And wish to donate resources to the campaign committee of Sen. Jack Reed (RI) and/or to an advocate group currently working with this issue.

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I support: 1.) Stronger SEC enforcement measures including increasing the money penalties in administrative and civil actions involving securities laws violations. 2.) Prescribing a fourth-tier penalty of triple monetary penalties for noncompliance with certain enforcement actions if the violator, within the five-year period preceding the prohibited act, was criminally convicted for securities fraud or became subject to a judgment or order imposing monetary, equitable, or administrative relief in any SEC action alleging fraud by such violator. And wish to donate resources to the campaign committee of Sen. Jack Reed (RI) and/or to an advocate group currently working with this issue.

Trustee Candidates

Senator If elected as a trustee, the campaign committee of Sen. Jack Reed (RI) will be unconditionally awarded the funds pledged to this issue along with a letter requesting him to favorably consider either reintroducing S.286 Stronger Enforcement of Civil Penalties Act of 2013 (113th Congress 2013-2014), or a similar version thereof. The Heritage Foundation If elected as a trustee, The Heritage Foundation will be awarded the funds pledged to this issue along with a letter requesting these funds be used to work and advocate for stricter SEC enforcement of securities law violators. The mission of The Heritage Foundation is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. It believes the SEC needs to do more to provide better data to Commissioners, other policymakers, and the public; that its enforcement efforts directed at fraud and other malfeasance by managers of large financial institutions are inadequate; and that reforms are necessary so that the SEC can better perform its important function.

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