Senator Charles Schumer has had it with the SEC, which he calls “a shadow of its former self,” with “a level of incompetence unseen since FEMA’s handling of Hurricane Katrina.”
He says he will propose legislation next week for the agency to be self-funded.
Schumer thinks that the agency is underfunded and the new resources would help it be more efficient to go after fraudsters and other schemers. He wants the commission to be able to keep the fees it collects from companies it regulates and not be funded from appropriations made by Congress.
The Senator, freshly annoyed with the SEC-Madoff debacle, said that his plan would bolster the SEC’s budget by hundreds of millions on an annual basis, enabling the agency to attract professionals with the expertise required to uncover “complex financial fraud.” (Side note: does this mean they wouldn’t have to go to the “fraud college?”)
From Schumer’s statement:
“It is clear the SEC needs a bigger, more reliable funding stream so it can retain and recruit the top talent that has fled the agency of late,” Schumer said. “Under the current system, the agency’s rank-and-file personnel are struggling to keep up with the more sophisticated actors in the market. We cannot keep starving the SEC’s budget or the agency will remain a shadow of its former self.”
Of course, there is a weird irony here. The SEC will essentially have “failed up”–having its budget expanded because it was so bad at its job. In the private sector, failures get to go bankrupt. (Or, well, they used to.) In the public sector, they get more authority and power.