Tighter budgets at the US Securities and Exchange Commission could mean killing vital technology upgrades needed to catch swindlers, the agency's chief said on Friday in a blunt appeal for more funding. With congressional Republicans threatening to restrain her agency's budget, SEC Chairman Mary Schapiro said the agency faces severe challenges in doing its existing job and in taking on new duties mandated under 2010's Dodd-Frank market reform law.
Denying needed budget increases could force "our market analysts to continue to use decades-old technology to recreate market events or to monitor trading that occurs at the speed of light," Schapiro told the annual SEC Speaks conference. "We need to ask ourselves if we want our chief securities regulator to have to pull the plug on data management systems and on a digital forensics lab needed to recreate the data that sophisticated fraudsters leave on hard drives and iPhones."
Appointed two years ago to head the investor protection agency, Schapiro is caught between two powerful political forces. On the one hand, she must implement and enforce scores of market reforms that were approved last year after the worst financial crisis in generations. That costs money.
On the other, Republicans swept to power in November in the House of Representatives are demanding deep federal spending cuts, partly to address the budget deficit problem and partly to undermine the Dodd-Frank reforms that they opposed. The SEC is scrutinising stock-offering rules, Schapiro said, following the news that Goldman Sachs planned a special investment vehicle for clients to invest in Facebook, the red-hot online social network company.
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