SEC Brings Fewer Enforcement Cases

[Rose Siding]

WASHINGTON -- The Securities and Exchange Commission brought about 10% fewer enforcement actions in fiscal 2006 than the prior year, marking a three-year decline from a record high in fiscal 2003, according to individuals familiar with the results....

...(T)the SEC's enforcement budget has grown to support about 1,200 staffers.

The SEC plans to release its enforcement results next week and is expected to point to a hiring freeze and staff turnover as factors in the declining case output.

Mr. Heine said preliminary estimates show the SEC lost 31 "full-time equivalent" positions in enforcement in fiscal 2006, a 2.4% decline from fiscal 2005.

"There's no question that if the staff numbers had not declined in the last few years, we would have been able to bring more cases," Mr. Heine said.

http://online.wsj.com/article/SB116190690950605420.html?mod=home_whats_news_us

[JudyM]

1. Meaning that corporate fraud can be more easily perpetrated. nt

[DeepModem Mom]

2. NYT: S.E.C. Facing Wide Review of Practices

S.E.C. Facing Wide Review of Practices
By GRETCHEN MORGENSON
Published: October 27, 2006

Securities and Exchange Commission, under scrutiny for its handling of an insider-trading case involving a prominent hedge fund, will be the subject of a broad review by the investigative arm of Congress, the Government Accountability Office.

Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee, last month asked the office in a letter to conduct a review of the commission because he was growing concerned, he said, about whether it is “faithfully adhering to its mission.”

The S.E.C. is charged with protecting investors by policing the nation’s financial markets and prosecuting violations of securities law by individuals and companies.

Last week, the G.A.O. accepted Mr. Grassley’s request that it review two S.E.C. divisions: its enforcement unit, which brings civil securities suits, and the office of compliance, inspection and examination, which oversees money managers, brokerage firms, stock exchanges and other regulated entities.

The G.A.O. will also examine whether the commission adequately monitors self-regulatory organizations — like the New York Stock Exchange and NASD — that refer cases to the commission for possible enforcement actions....

http://www.nytimes.com/2006/10/27/business/27sec.html

[denverbill]

3. What else would you expect Grassley? Your whole party hates regulation.

Bush specifically appoints people to head enforcement who don't believe in enforcing the law, whether it's EPA, FDA, USDA, or SEC.

The only laws that actually get enforced are those that help big corporations, like banning reimportation of drugs.