Rep. Spencer Bachus Criticizes SEC for Being 'Flawed and Inefficient'

(August 3, 2011) — House Financial Services Committee Chairman Spencer Bachus (R-Alabama) says that simply providing more funding to the Securities and Exchange Commission (SEC) will do nothing to solve the regulator’s inefficiencies and structural failures.

“The SEC is structurally flawed and suffers from operational inefficiencies and organizational incoherence,” said Bachus in a release. The legislation, to be called the SEC Modernization Act, “will be a comprehensive restructuring of the SEC. It will make the SEC more efficient, consolidate duplicative offices, enable the agency to use better technology, and strengthen ethical safeguards to avoid conflicts of interest.”

The legislation would shut down the Office of Compliance, Inspections and Examinations and move its duties under the Division of Trading and Markets and Division of Investment Management. Additionally, it would divide the Division of Risk, Strategy and Innovation, re-assigning that role to separate offices inside the other four divisions.

He continued: “Simply providing yet more funding to the SEC without first correcting its flaws will do nothing but prolong these inefficiencies and structural failures,” he said. “Without fundamental reform, there will never be any real improvement to the SEC’s operations.”

Bachus’ legislation will also impose reforms recommended by the SEC’s Inspector General, the Government Accountability Office and a Boston Consulting Group report mandated by the Dodd-Frank Act. According to the congressman, the SEC’s budget this year is at $1.185 billion, up 6% over 2010—and nearly triple what it was a decade ago.

The SEC has been widely criticized for not enforcing greater oversight after the 2008 financial crisis and, since then, it has upped its efforts.