SEC Head Objects To Obama's Financial Watchdog Plan

SEC Head Objects To Obama's Financial Watchdog Plan - 5/21/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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SEC Head Objects To Obama's Financial Watchdog Plan, Organization Assume Oversight Of Mutual Funds
Staff Writer

Associated Press. May 21, 2009
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EXCERPT: The head of the Securities and Exchange Commission is objecting to a plan being weighed by the Obama administration to create a new financial watchdog for consumers that would assume oversight of mutual funds. The SEC chief's split with the administration shows how hard it may be for a broad overhaul of financial rules to overcome turf wars among various regulators and for a consensus to be reached on Capitol Hill. SEC Chairman Mary Schapiro said Wednesday she opposed the plan discussed Tuesday night by Treasury Secretary Timothy Geithner and other administration officials that would chip away at the SEC's own powers. She said giving any new entity authority over mutual funds would lessen the government's protection of investors — her agency's core mission. "I would question pretty profoundly any model that would try to move investor protection functions out of the Securities and Exchange Commission," Schapiro told reporters at the agency's headquarters. "Investor protection is woven through everything that happens in this organization." Many of the SEC's responsibilities — such as companies' financial disclosures, shareholder rights, stock trading, brokerage firm practices and mutual funds — involve investor protection, Schapiro said. "So it's not a discrete thing that gets moved away without really damaging the fabric of the entire investor protection regime," she said. But the SEC's effectiveness as protector has been called into question after revelations in December that the agency failed to detect the massive pyramid scheme run by money manager Bernard Madoff, despite red flags raised to its staff by outsiders over the course of a decade. Schapiro, an Obama appointee who became SEC chairman in January, has taken several actions intended to strengthen and speed the agency's enforcement efforts and tighten its internal processes.

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