WEST PALM BEACH, FL (www.hedgeco.net) – The U.S. Securities and Exchange Commission has defended actions taken the agency in light of mounting criticisms that it failed to uncover the mutual fundscandals and illegal trading activities which cost market investors billions of dollars. Some of the criticism was coming from congressional investigators from both the Republican and DemocraticParty. The SEC�s Director of Office of Compliance Inspections and Examinations, Lori Richards told the Lawmakers that the Agency pursued issues deemed to bigger risks to investors.
Richards said, “The challenge for any examination program is to determine how best to use limited resources to oversee a large and diverse industry.� The U.S. Government Accountability Office said in an earlier report, the SEC inspectors should have uncovered the mutual fund trading abuses before the New York Attorney General Elliot Spitzer exposed the scandals.
According to Richards, the SEC inspectors focused on key areas of potential abuses including the marketing and sales of mutual funds, and also in other areas to make sure that mutual funds were not inflating their investment returns to their investors. Since the scandals were put to light by New York State Attorney General Elliot Spitzer, the SEC became very aggressive in its regulatory efforts following the appointment of William Donaldson to lead the government body.
William Galvin of the Massachusetts Secretary of State�s Office said, “The SEC simply didn’t do its job. It dropped the ball; further accusing the agency of what he characterized as Investment Monopoly.� Many now question if we are entering a new era, marking the end of SEC aggressive enforcement actions. With President Bush�s nomination last week of Republican Rep. Christopher Cox, analysts now think that Christopher Cox may not pursue such aggressive enforcements to the extent that his predecessors, William Donaldson did.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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