The U.S. Chamber of Commerce urged the Securities and Exchange Commission (SEC) to improve its enforcement practices on Wednesday.
The Center for Capital Markets Competitiveness (CCMC) of the U.S. Chamber of Commerce released a report regarding its examination of the enforcement program of the SEC and recommendations to improve the practices of the participants.
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U.S. Chamber aims to strengthen SEC’s ability to detect & deter fraud
CCMC President and CEO David Hirschmann said, “Both investors and market participants all benefit from tough-as-nails, effective enforcement coupled with a clear and fair process.”
Hirschmann said the recommendations in the report were designed to strengthen further the ability of the Commission to detect and deter fraud and ensure that honest market participants benefit from a clear and fair investigation process.
“The SEC’s Enforcement Program is a crucial component of its mission. Our research identified a number of ways the SEC can build on the progress it has made to create a level playing field through effective enforcement, and at the same time address ambiguities in the process that can cause unnecessary and counter-productive confusion,” added Hirschmann.
U.S. Chamber of Commerce recommendations
The 2010 Dodd-FrankWall Street Reform and Consumer Protection Act expanded the authority of the SEC to bring almost all enforcement actions as administrative proceedings or civil action.
The U.S. Chamber of Commerce emphasized that the SEC may obtain similar types of actions and remedies, but the forums have significant differences in processes.
“These differences can have a significant impact on the procedural rights of a defendant/ respondent and, ultimately, on the respondent’s ability to obtain a full, fair, and impartial adjudication,” according to the U.S. Chamber of Commerce.
The markets watchdog offered 28 recommendations to improve the enforcement program of the SEC. Some of the recommendations include adopting a uniform policy for administrative proceedings and creating a procedure to allow respondents to challenge the choice of forum.
The U.S. Chamber of Commerce also suggested adopting a policy that enables defendants in an administrative proceeding to file a notice to the federal district court for a jury trial.
It also recommended for the Enforcement Division to provide consistent access to its investigative files with adequate time to permit a meaningful response to a Wells Notice or request for a white paper
SEC response to the U.S. Chamber of Commerce
In response to the report of the U.S. Chamber of Commerce, Andrew Ceresney, Director of the SEC Enforcement Division said, “The report contains certain recommendations that would significantly weaken the Commission’s ability to protect investors through strong and effective enforcement of the federal securities laws.”
He added that the SEC will continue to “aggressively hold wrongdoers accountable.”