Shutdown Shuts Down Securities Regulators - The Industry Spread

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

CFTC Logo, Dodd/Frank

Shutdown Shuts Down Securities Regulators

January 13, 2019

SECThe government shutdown is affecting securities regulators.

The Securities and Exchange Commission (SEC) has furloughed approximately 94% of their employees while the government has been shut down.

Newly minted House Financial Services Committee Chair Maxine Waters, a Democrat from the State of California, made note of it in a recent speech on the House floor.

“This President has all but closed the doors of the SEC, furloughing 94% of the agency and essentially providing fraudsters and schemers with a free pass to swindle investors and small businesses. With such a skeleton crew of less than 300 staff, the SEC cannot possibly oversee the activities of the over 26,000 registered entities, such as investment advisers, broker-dealers, and stock exchanges. Worse, the SEC is unable to hold bad actors accountable through most enforcement actions, preventing harmed investors from obtaining relief.

“But the importance of the SEC goes beyond ensuring the rule of law. Businesses that are looking to enter the public stock markets may have to delay their Initial Public Offerings because the SEC cannot approve their documents. Businesses seeking guidance from the SEC are left in legal limbo until the SEC can get back to work.

Maxine Waters
Maxine Waters

“The Trump shutdown is jeopardizing the integrity of our financial markets and the hard-earned savings of millions of Americans. So, let’s end this Trump shutdown and open the government so that the SEC and other agencies can get back to work on behalf of the public.”

The US government has been shut down to all but essential services since December 22, 2019, when the President, the Republicans, and Democrats could not agree on a budget moving forward.

With no more money allocated, all but the most essential government services are shut down as well.

This includes the SEC.

Waters continued in the speech: “Mr. Speaker and Members, I appreciate some of the comments that have been made about the fact that we have been able to work together on both sides of the aisle on the Financial Services Committee, working on such things as the JOBS Act but we can’t do any of that. We cannot move. We cannot get to work for the American people because this President not only has shut down the government, but he took responsibility for it.

“He wanted everybody to know that he did it, that he not only did it, but he’s going to continue to do it until he can bend us to his will and give him $5 billion dollars plus to put up a wall of some kind. We don’t even know what it is.”

The SEC is not the only trading regulator hit; according to the website, Pensions and Investments, approximately 90% of employees at the Commodities Futures Trading Commission (CFTC) will also be furloughed.

FINRA, the Financial Industry Regulatory Authority, is a self-regulatory organization, and not a part of the government- though it maintains government functions- and is not affected by the shutdown.

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