07 February 2009

New SEC chair enhances enforcement division

SEC chair Schapiro ended the Commission's two-year ‘penalty pilot’ experiment, which introduced significant delays into the process of bringing a corporate penalty case. She also called for a new era of responsibility on Wall Street.

SEC chairman Mary Schapiro ended the Commission's two-year "penalty pilot" experiment, which introduced significant delays into the process of bringing a corporate penalty case, and by accelerating the approval of formal orders of investigation.

 

Despite possible institutional reforms, Schapiro made clear that “there needs to be a new era of responsibility on Wall Street and throughout our markets”, the new chairwoman said. “The sooner that Wall Street works to repair its own problems, the sooner investors will once again find the confidence to invest.”

 

Schapiro also outlined some of the priority initiatives which include:

Ø       Improving the quality of credit ratings by addressing the inherent conflicts of interest credit rating agencies face as a result of their compensation models and limiting the impact of credit ratings on capital requirements of regulated financial institutions.

Ø       Reducing systemic risk to investors and markets by promoting — and regulating appropriately — centralized clearinghouses for credit default swaps.

Ø       Strengthening risk-based oversight of broker-dealers and investment advisers.

Ø       Improving the quality of audits for non-public broker-dealers and promoting the safe and sound custody of customer assets by any broker-dealer or investment adviser.

 

Full speech

 

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