SEC Commissioner Aguilar Urges that the SEC Be Given More Enforcement Powers and Resources
SEC Commissioner Luis Aguilar delivered a speech on the current lack of trust in the capital markets. Motivated by recent reports that, if taken together, imply that investors have little or no trust in the markets (e.g., 79% of investors have no trust in the financial system), Commissioner Aguilar argues that the SEC must be proactive in demonstrating how it is pro-investor in order for public trust in the markets to return. To that end, Aguilar considers in depth the ways in which the SEC Enforcement Program can do more to effectively prosecute violators of the securities laws. This includes: (i) focusing on individual accountability for misconduct; and (ii) having a maximum deterrence strategy that focuses on using available sanctions to effectively deter and punish misconduct; (iii) paying particular attention to recidivists to protect against further misconduct.
Aguilar further urged Congress to pass the SEC Penalties Act, a bill that will provide the SEC with more tools to demand meaningful accountability from individuals and entities involved in misconduct. However, he notes that the SEC's resources are limited and have failed to keep up with the growth in the markets in terms of sheer size and complexity. Accordingly, Aguilar argues that the SEC's staff must have more resources in order to successfully police the marketplace.
View speech in full here (links externally to SEC website).