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April 1, 2013

Politicians Helping Wall Street Again

Some officeholders help, or attempt to help, Wall Street in so many ways, usually unseen, but sometimes highly visible.  The most recent example of this is a March 22, 2013 letter sent by two of the most senior Republican Chairmen in the House to the SEC seeking all sorts of information, supposedly because they are concerned about the agency’s priorities and use of time and money.  Making such onerous, and all too often totally needless, demands is too common and, often, really meant to score political points.

The latest letter criticized the SEC for defending an appeal of a case that the SEC won unanimously in the 2nd Circuit Court of Appeals.  The House Chairmen wrongly recast this as the SEC foolishly wasting money and time defending a lost case and asked the SEC for a calculation of the staff hours devoted to the case.  The letter also, unsurprisingly, faults the SEC for a number of other things, like not giving top priority to the so-called JOBS Act.

The letter, it turns out, is wrong on every point, as we pointed out in a letter to the SEC Chairman on March 29.  The SEC had an obligation, not just a right, to defend the unanimous court victory.  And, even though the Supreme Court did not agree with the SEC on part of the case, other parts of the victory remained and were essential to defend.  The letter also turns the SEC’s rulemaking priorities upside down.   Rather than giving top priority to the JOBS Act—a statute rolling back investor protections—the SEC should be focused above all on completing implementation of the Dodd-Frank financial reform law—which seeks to prevent another multi-trillion dollar financial crisis and economic collapse, as detailed in this Report.  

Lastly, the House Chairmen bemoan the fact that the SEC doesn’t have enough resources to do its job, but, rather than fight to get it more resources, they make frivolous demands that needlessly consume the limited resources.  In our letter, we urged the SEC to detail in its response the funds that would be necessary for the SEC to get its critical job done for investors, markets and the financial system. 

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