CREW Report Reveals Promised SEC Reforms Moving Slowly

SEC Documents Suggest SEC May Not Be Moving Fast Enough to Stop the Next Madoff

WASHINGTON--(BUSINESS WIRE)-- A report issued today by Citizens for Responsibility and Ethics in Washington (CREW) documents the slow pace and limited progress of the Securities and Exchange Commission (SEC) in delivering promised reforms to its Enforcement Division in the wake of the agency’s failure over a 16-year period to detect Bernard Madoff’s massive Ponzi scheme.

“Despite its historic failure to prevent Bernie Madoff’s staggering fraud, the SEC is dragging its feet on some of the most urgent structural reforms needed,” said CREW’s Executive Director Melanie Sloan. “The SEC may be headed in the right direction, but not at the speed Americans have the right to expect given the agency’s monumental failures.”

Nearly 18 months ago when the Madoff scheme imploded, incoming SEC Chairman Mary L. Schapiro promised to make fundamental reforms to the Enforcement Division, ranging from the creation of a central database to manage tips, complaints and referrals, to the establishment of specialized units better able to analyze highly specialized and complex areas of security law. Following up on this promise, CREW sent a Freedom of Information Act (FOIA) request to the SEC in October 2009, seeking documents sufficient to show the progress the SEC has made in seven key areas.

CREW found that despite the urgent need for significant structural reform, the SEC has not rushed to implement many of the promised changes. The agency has made the most progress in filling new staff positions and adding new offices, but given how long this has taken, the impact of these steps is not yet discernable. At bottom, the central question of whether the SEC has instituted meaningful and effective reforms to address the systemic problems revealed by the agency’s failure to uncover Mr. Madoff’s blatant criminal conduct still cannot be answered.

“The slow pace of reform is hard to fathom,” added Sloan. “If we’ve learned anything from the agency’s failure to stop Bernie Madoff and subsequent swindlers, it’s that the country needs an aggressive SEC working to protect Americans’ hard earned dollars.”

Click here to read CREW’s report, “Reform at the SEC, Fiction or Reality?”

Click here to read a summary of the report’s findings.

Citizens for Responsibility and Ethics in Washington (CREW) is a non-profit legal watchdog group dedicated to holding public officials accountable for their actions. For more information, please visit www.citizensforethics.org or contact Peter Bjork at 202.408.5565 or pbjork@citizensforethics.org.

CONTACT:

CREW
Peter Bjork, 202-408-5565
pbjork@citizensforethics.org

KEYWORDS:   United States  North America  District of Columbia

INDUSTRY KEYWORDS:   Public Policy/Government  Congressional News/Views  Other Policy Issues  Public Policy  White House/Federal Government  Professional Services  Finance

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