Read time: 2 minutes

Obama May Strip SEC Of Powers In Regulatory Overhaul

While this may not solve everything, I can't help but think that a shakeup, a reminder that sometimes actions (or inactions) do have consequences, wou

While this may not solve everything, I can't help but think that a shakeup, a reminder that sometimes actions (or inactions) do have consequences, would be an excellent idea for this agency:

May 20 (Bloomberg) -- The Obama administration may call for stripping the Securities and Exchange Commission of some of its powers under a regulatory reorganization that could be unveiled as soon as next week, people familiar with the matter said.

The proposal, still being drafted, is likely to give the Federal Reserve more authority to supervise financial firms deemed too big to fail. The Fed may inherit some SEC functions, with others going to other agencies, the people said. On the table: giving oversight of mutual funds to a bank regulator or a new agency to police consumer-finance products, two people said.

The 75-year-old SEC, chartered to oversee Wall Street and safeguard investors, has seen its reputation tarnished as some lawmakers blamed it for missing the incipient financial crisis and failing to detect Bernard Madoff’s $65 billion Ponzi scheme. Any move to rein in the agency is likely to provoke a battle in Congress, which would need to approve the changes, and draw the ire of union pension funds and other advocates for shareholders.

“It would be a terrible mistake,” said Stanley Sporkin, a former federal judge and enforcement chief at the SEC. “Whatever the SEC has done or didn’t do, it is still the premier investor protection agency around.”

Yes, and it's been doing such a great job up until now, hasn't it?

SEC Chairman Mary Schapiro’s agency has been mostly absent from negotiations within the administration on the regulatory overhaul, and she has expressed frustration about not being consulted, according to people who have spoken with her. She has pledged to fight any attempt to diminish the SEC, they said.

Treasury Secretary Timothy Geithner was set to discuss proposals to change financial regulations at a dinner last night with National Economic Council Director Lawrence Summers, former Fed Chairman Paul Volcker, ex-SEC Chairman Arthur Levitt and Elizabeth Warren, the Harvard University law professor who heads the congressional watchdog group for the $700 billion Troubled Asset Relief Program.

Can you help us out?

For 16 years we have been exposing Washington lies and untangling media deceit. We work 7 days a week, 16 hours a day for our labor of love, but with rising hosting and associated costs, we need your help! Could you donate $20 for 2020? Please consider a one time or recurring donation of whatever amount you can spare, or consider subscribing for an ad-free experience. It will be greatly appreciated and help us continue our mission of exposing the real FAKE NEWS!

More C&L Coverage

Comments

NOTE: We will be changing to a new commenting platform in the next couple of weeks. We will supply more details as we get closer to the change. We understand some users are having problems with comments loading and this will hopefully remedy that problem

We welcome relevant, respectful comments. Any comments that are sexist or in any other way deemed hateful by our staff will be deleted and constitute grounds for a ban from posting on the site. Please refer to our Terms of Service (revised 3/17/2016) for information on our posting policy.