Give us more money.
That was a top message from Securities and Exchange Commission leaders today during "The SEC Speaks," an annual conference sponsored by the Practicing Law Institute.
"We've been operating under a continuing resolution that has hampered our ability to do what investors and capital markets deserve,” said Chairwoman Mary Schapiro. “It is a strain that is already having an impact on our core mission — separate and apart from the new responsibilities that Congress gave us to regulate derivatives, hedge fund advisers and credit rating agencies. It is a strain that will intensify the longer the budget remains at existing levels.”
Schapiro pointed out that the agency last year sent the U.S. Treasury $300 million more in collected transaction fees than it spent, and returned $2 billion to harmed investors.
“We will continue to pay our own way in future years,” she said.
In President Obama’s FY 2011 budget request, SEC funding is set at $1.258 billion, a 12% increase over its FY 2010 budget. The 2011 budget has not been passed, and the continuing resolution funding the federal government runs out on March 4.
For the SEC, the lack of extra funding means pulling the plug on data management systems and on a digital forensics lab, and turning away “the influx of market and economic experts willing to complement our existing talent,” she said.
Commissioner Luis Aguilar noted that the agency has been forced to cut back on travel for examiners, and that trips involving overnight stays are no longer possible. The SEC also lacks money to hire expert witnesses or take depositions.
“Because of the budget constraints, the SEC cannot continue to invest in technology and specialized skills that would facilitate the agency’s ability to pursue quickly evolving market practices, transactions and products,” he said. “These budget constraints are negatively affecting the SEC’s ability to carry out its core mission.”
Enforcement Division director Robert Khuzami chimed in too, calling the current budget “a real strain.”
The amount of additional money the division needs for IT, document management and expert witnesses “is really pretty insignificant,” he said. “If we were to have it, the difference it would make for us to do our job of investor protection would be ten-fold.”