Grassley urges SEC to tap all available resources
WASHINGTON — Sen. Chuck Grassley has asked the Chairman of the Securities and Exchange Commission (SEC) to remedy the commission’s failure to tap investigative resources provided by Self-Regulatory Organizations by coming up with a plan for the for the commission to consider such information as part of its work to safeguard the integrity of U.S. markets.
Grassley made his appeal following the completion of a new independent audit that said the securities industry reports mountains of information about suspicious transactions but SEC computer systems can’t search the data.
“If investigators can’t search that data, it’s like working with one hand tied behind their backs. It’s a no-brainer that the commission ought to be at least looking at this information and have a computer system that can spot trends and let investigators to review the data as effectively and efficiently as possible,” Grassley said. “The Securities and Exchange Commission also needs to review the internal audits that the Self-Regulatory Organizations put together to make sure they’re credible and even-handed.”
The report released today by the Government Accountability Office (GAO) concerning the SEC’s oversight of Self-Regulatory Organizations is the second of two reviews that Grassley requested as part of his congressional oversight work. The first report of the GAO, issued in September, criticized the SEC for failing to close cases and keeping them open for years even though there was no ongoing investigation. Both requests stemmed from allegations made by a fired SEC Enforcement Division attorney and, in both cases, the GAO findings validated those charges.
In August, Grassley and Sen. Arlen Specter released their own report on the mishandling of an insider-trading probe involving Pequot Capital Management, Inc. The Grassley-Specter report detailed the Inspector General’s failure to investigate credible allegations by former SEC attorney Gary Aguirre that his supervisors pulled punches in the investigation because of one witness’ political clout.
Grassley said today that the SEC’s Enforcement Division and Office of Compliance,
Inspection and Examination brings important civil enforcement actions and administrative proceedings against individuals and companies who violate securities laws and regulations.
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