Apr 21 2009

SHELBY: SEC MUST HAVE RESOURCES TO PURSUE FRAUD

U.S. Senator Richard Shelby (R-AL), ranking Republican on the Senate Banking Committee and the Commerce-Justice-Science Appropriations Subcommittee, today joined Senator Charles Schumer (D-NY) in announcing an amendment to legislation currently under consideration by Senate.  The amendment would increase the SEC’s budget by $20 million for two years, allowing the agency to hire specialized investigators and additional prosecutors to pursue financial crimes.  The funding would also allow the SEC to make necessary improvements to its technology systems in order to more efficiently investigate tips and complaints, manage enforcement cases, and assess risk.

The proposal would amend S. 386, the Fraud Enforcement and Recovery Act, which provides increased funding for the Department of Justice, but not for the SEC, to investigate and prosecute financial fraud.  In January of this year, Shelby and Schumer introduced the SAFE Markets Act, which sought to increase the budgets of the Department of Justice and the SEC by a combined $110 million annually to pursue white-collar crimes.  The senators believe it is critical to also increase the SEC’s budget in light of an increasing number of financial frauds and Ponzi schemes, which have outpaced the growth of the SEC’s investigative and enforcement capabilities.  A vote on the amendment is expected this week.  

SEC Chairwoman, Mary Schapiro, who today joined the senators in a press conference on the amendment, strongly endorsed the proposal.  Following the news conference, Sen. Shelby issued the following statement.

“Financial frauds greatly undermine investors’ confidence in the integrity of our markets,” said Shelby.  “ Such crimes are particularly damaging in light of our current economic conditions.  Regrettably, the SEC’s resources have not kept pace with the growth of the markets, limiting its ability to prevent and prosecute frauds.  The Fraud Enforcement and Recovery Act makes many important improvements, but falls short with respect to the needs of the SEC.  This amendment will ensure those needs are filled so the SEC will be able to better police our financial markets and safeguard investors.”