Schapiro asks Congress to boost SEC fines - The Deal Pipeline (SAMPLE CONTENT: NEED AN ID?)
Subscriber Content Preview | Request a free trialSearch  
  Go

Regulatory

Print  |  Share  |  Reprint

Schapiro asks Congress to boost SEC fines

by Ira Teinowitz in Washington  |  Published November 30, 2011 at 12:50 PM
Schapiro-asks-Congress-to-boost-SEC-fines227.jpgSecurities and Exchange Commission Chairwoman Mary Schapiro is calling on Congress to boost the fines the agency can levy for serious violation of its rules and also the penalties for repeat offenders.

In a letter sent Monday, Nov. 29 -- the same day Federal District Court Judge Jed Rakoff rejected an agency settlement with Citigroup Inc. over marketing of mortgage-backed securities and suggested the SEC wasn't being aggressive enough on "recidivists" -- Schapiro asked Sens. Jack Reed, D-R.I., and Mike Crapo, R-Idaho, to alter the way the SEC can fine companies and individuals and also the maximum future fines.

Schapiro indicated in the letter that the request was tied to a Nov. 16 hearing of the Senate Banking Committee's subcommittee on securities insurance and investment and made no mention of the court ruling. Schapiro asked the senators to boost the fine for the most serious infractions to $1 million per violation for an individual and $10 million for entities -- up from $150,000 and $725,000, respectively. She asked the definitions for another SEC penalty -- 3 times the net gain an investor makes -- be altered to 3 times the gross gain for instances where the "net gain" is small compared to the magnitude of the wrongdoing. She also asked the commission be allowed in some cases to calculate the fine at 3 times the amount of investor losses, rather than basing it on the profits made by a violator.

"These changes would provide the commission with greater flexibility with regard to monetary penalties in cases where the misconduct is very serious, repeated or involves substantial investor losses but the current statutes do not allow for an appropriately significant penalty," she wrote.

Schapiro also asked that the agency be allowed to seek 3 times the penalties for recidivists who have been convicted of securities fraud or subject to administrative relief within the past five years. Finally, she asked the SEC be allowed to more easily seek civil penalties if an individual or entity violates an injunction or other bar.
Share:
Tags: Chairwoman Mary Schapiro | Citigroup Inc. | Congress | Federal District Court Judge Jed Rakoff | Jack Reed | Mike Crapo | SEC | Securities and Exchange Commission | Senate Banking Committee's subcommittee on securities insurance and investment

Free preview

This is only a preview of The Deal's sophisticated coverage. Explore the real-time intelligence as researched and reported on by our team of financial journalists with a license to The Deal Pipeline. Click here for more information.

Meet the journalists

Ira Teinowitz

Senior reporter, Washington bureau

Contact



Movers & Shakers

Launch Movers and shakers slideshow

Ken deRegt will retire as head of fixed income at Morgan Stanley and be replaced by Michael Heaney and Robert Rooney. For other updates launch today's Movers & shakers slideshow.

Video

Coming back for more

Apax Partners offers $1.1 billion for Rue21, the same teenage fashion chain it took public in 2009. More video

Sectors