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March 26, 2013

GOP Lawmakers Press SEC on Legal Costs

Two key House Republicans are demanding that the Securities and Exchange Commission detail the resources it devoted to a failed legal effort to relax time limits for seeking civil penalties in fraud cases, saying the SEC’s resources could be better spent on other priorities such as implementing last year’s JOBS Act.

Reps. Jeb Hensarling (R., Texas), who chairs the House Financial Services Committee, and Scott Garrett (R., N.J.), who chairs a subcommittee, said in a letter to SEC Chairman Elisse Walter that the agency should “use its limited resources more productively… rather than pursue baseless legal claims through several layers of appeal.” The letter was dated Friday but not released until Monday.

Last month, the U.S. Supreme Court unanimously rejected the SEC’s argument that the five-year statute of limitations for pursuing penalties should start when it discovers alleged misconduct, rather than five years from when the misconduct occurs. In its ruling in the case, Gabelli Funds v. SEC, the justices said the agency’s purpose is to root out fraud and that it has legal tools at hand to achieve that goal within the existing five-year limit.”

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Read full Wall Street Journal blog post article here

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