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05-11-2003, 12:31 PM
New York Attorney General Eliot Spitzer states that he had to act to stop Wall Street fraud because of the inaction of the SEC. Two things have occured since Mr. Spitzer acted; first, the SEC has an aggressive and experienced chairman, and second the Sarbanes/Oxley Act gave a new flow of funds to the SEC.
Although the SEC needed additional funds, the funds result from user charges on the financial community. The structure and magnitude of these charges should be examined.
Read the following from Reuters:
U.S. SEC chief wants greater say in enforcement
Thu May 8, 2003 10:57 PM ET
By Greg Cresci and Jonathan Stempel
NEW YORK, May 8 (Reuters) - William Donaldson, the top U.S. securities regulator, on Thursday thanked New York Attorney General Eliot Spitzer for combating conflicts of interest on Wall Street, but suggested Spitzer should let the federal government take charge in future enforcement cases.
"Hopefully, the genie will go back in the bottle and will voluntarily (keep) bringing the cases and referring them and so forth, but stop at the solution stage, stop at the stage of designing a marketplace," said Donaldson, who chairs the Securities and Exchange Commission. "That's a federal responsibility."
Donaldson, who took over the SEC in February, made the comments after his speech on corporate governance to the Economic Club of New York.
Ten days earlier, Donaldson, Spitzer and other regulators shared a podium in Washington, D.C. to announce a $1.4 billion settlement with 10 Wall Street banks.
Regulators accused the banks of misleading investors by issuing biased stock research to win investment banking business. Spitzer began the probes almost two years ago.
The investigations embarrassed firms such as Citigroup Inc. C.N , Credit Suisse First Boston CSGZn.VX and Merrill Lynch & Co. MER.N , which are paying the biggest penalties. They admitted no wrongdoing.
For months, Spitzer has publicly lamented what he perceived as his federal counterparts' reluctance to root out financial malfeasance, and has asserted his own right to go after investment firms under New York state law.
"The Feds had fallen down on the job," Spitzer said last September.
Donaldson, for his part, said state regulators might get in the SEC's way by taking too active an enforcement role. He warned of potentially damaging fissures in the regulatory arena.
"The possible Balkanization if you will, of regulation by dispersing it throughout the country to states' attorneys general or local regulatory agencies is a risk," he said.
Still, he said other regulators could play an important role in enforcing securities laws.
"As far as I'm concerned, and I've spoken with Eliot Spitzer about it, we welcome all the help we can get," he said.
Although the SEC needed additional funds, the funds result from user charges on the financial community. The structure and magnitude of these charges should be examined.
Read the following from Reuters:
U.S. SEC chief wants greater say in enforcement
Thu May 8, 2003 10:57 PM ET
By Greg Cresci and Jonathan Stempel
NEW YORK, May 8 (Reuters) - William Donaldson, the top U.S. securities regulator, on Thursday thanked New York Attorney General Eliot Spitzer for combating conflicts of interest on Wall Street, but suggested Spitzer should let the federal government take charge in future enforcement cases.
"Hopefully, the genie will go back in the bottle and will voluntarily (keep) bringing the cases and referring them and so forth, but stop at the solution stage, stop at the stage of designing a marketplace," said Donaldson, who chairs the Securities and Exchange Commission. "That's a federal responsibility."
Donaldson, who took over the SEC in February, made the comments after his speech on corporate governance to the Economic Club of New York.
Ten days earlier, Donaldson, Spitzer and other regulators shared a podium in Washington, D.C. to announce a $1.4 billion settlement with 10 Wall Street banks.
Regulators accused the banks of misleading investors by issuing biased stock research to win investment banking business. Spitzer began the probes almost two years ago.
The investigations embarrassed firms such as Citigroup Inc. C.N , Credit Suisse First Boston CSGZn.VX and Merrill Lynch & Co. MER.N , which are paying the biggest penalties. They admitted no wrongdoing.
For months, Spitzer has publicly lamented what he perceived as his federal counterparts' reluctance to root out financial malfeasance, and has asserted his own right to go after investment firms under New York state law.
"The Feds had fallen down on the job," Spitzer said last September.
Donaldson, for his part, said state regulators might get in the SEC's way by taking too active an enforcement role. He warned of potentially damaging fissures in the regulatory arena.
"The possible Balkanization if you will, of regulation by dispersing it throughout the country to states' attorneys general or local regulatory agencies is a risk," he said.
Still, he said other regulators could play an important role in enforcing securities laws.
"As far as I'm concerned, and I've spoken with Eliot Spitzer about it, we welcome all the help we can get," he said.