Not More Regulation Just Better

TW: This piece frames how an administration opposed to government regulation can hamstring the entire regulatory process. It was not necessarily changing the rules but it was slow walking the process during the period in which some of the more egregious excesses leading up to the present crisis occured. Our regulatory processes will likely change but most importantly I would hope the current administration instead of doing many things to put hurdles in front of existing regs would merely actually enforce them. We do not necessarily need a bunch of new regs just judicious enforcement. These type things are why you need competent governance in place of ideologues.

From Norris at NYT:
"One virtue of appointing Mary Schapiro as chairman of the Securities and Exchange Commission is that she used to be a member of the commission, and therefore knows how things were done before Chris Cox slowed them down.
Today she announced she is ending two Cox policies that delayed enforcement actions. No longer will the commissioners demand advance approval of penalties to be imposed on companies as part of settlement talks, and the commission will no longer stall for weeks on a decision on whether to allow the staff to open a formal investigation.

Here are the relevant parts of her speech:
As a first, but significant, step in empowering our enforcement staff, I am this week taking action to end the Commission’s two-year “penalty pilot” experiment, which had required the enforcement staff to obtain a special set of approvals from the commission in cases involving civil monetary penalties for public companies as punishment for securities fraud.
In speaking to our enforcement staff, I’ve been told that these special procedures have introduced significant delays into the process of bringing a corporate penalty case; discouraged staff from arguing for a penalty in a case that might deserve a penalty; and sometimes resulted in reductions in the size of penalties imposed.

At a time when the S.E.C. needs to be deterring corporate wrongdoing, the penalty pilot sends the wrong message. The action I am taking to end the penalty pilot is designed to expedite the commission’s enforcement efforts to ensure that justice is swiftly served to those public companies who commit serious acts of securities fraud.

Another immediate change I am putting in place to bolster the S.E.C.’s enforcement program is to provide for more rapid approval of formal orders of investigation — the permission slips given out by the commission that allow S.E.C. staff to use the power of subpoenas to compel witness testimony and the production of documents. When I was a commissioner, formal orders were routinely reviewed and approved within a couple of days by written approval of the commission or by “duty officer” — a single commissioner acting promptly and on behalf of the entire commission.

Today, however, many formal orders of investigation are made subject to full review at a meeting of all five commissioners, necessitating that they be placed on the calendar sometimes weeks in advance. In investigations that require use of subpoena power, time is always of the essence, and every additional day of delay can be costly. To ensure that subpoena power is available to S.E.C. staff when needed, I’ve given direction for the agency to return to the prior policy of timely approval of formal orders by seriatim approval or where appropriate, by a single commissioner acting as duty officer."
http://norris.blogs.nytimes.com/2009/02/06/unleashing-enforcement/