The Financial Services Committee of the House of Representatives recently conducted an oversight hearing of the SEC on April 29, 2014.  SEC Chair May Jo White was asked to testify in defense of the agency’s $1.7 billion budget request after already unprecedentedly high budgetary appropriations in recent years. Committee Chairman Jeb Hensarling (R-TX) was critical of the SEC’s budget request noting that the budget has increased 80 percent over the past decade, and 300 percent in the past 14 years. While on the surface the scrutiny of the SEC’s high budget may seem like a win for financial institutions who are facing record-high examinations, investigations, charges, regulations and supervisory actives, in actuality Chairman Hensarling was critical of the SEC’s failure to enact enough new regulations and bring enough enforcement actions.  Chairman Hensarling noted that the SEC has enacted less than half of the required rulemakings under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).

Even less reassuring, Chair White’s testimony presents a laundry list of agenda items and ambitions for expanded supervision of the financial markets, and applauds the highest ever collection of penalties last year at $3.4 billion – a number that is likely to grow with increased resources in 2014 and 2015.

Chair White cited the following plans and priorities for the upcoming year:

  • Rules to require policy and technological controls in money market funds.
  • New Foreign Corrupt Practices Act (FCPA) litigation against corporations.
  • Supervision of recordkeeping requirements of Volcker Rule implementation.
  • Complete more settlements with admissions of guilt according to the agency’s new settlement protocol.

If granted the additional requested budgetary appropriations, the SEC aims to:

  • Strengthen its enforcement program.
  • Invest in technology to better understand and regulate high-speed markets.
  • Hire additional staff – Chair White noted that in 2004 the SEC maintained 19 examiners per trillion dollars of investments, whereas today that number has fallen to eight examiners.
  • Enhance internal information technology (IT) and training.


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