WASHINGTON The Obama administration announced plans on Thursday to boost the U.S. Securities and Exchange Commission's budget by 13 percent to help the investor protection agency better police markets and detect fraud.
"This past year, the consequences of poor market oversight became abundantly clear," the administration said in its first budget proposal.
Under President Barack Obama's plan, the SEC's budget for fiscal 2010 would increase by more than 13 percent from its 2008 budget of $906 million.
For the current fiscal 2009 year, ending September 30, the Bush administration asked Congress to increase the SEC's budget by less than 1 percent to about $914 million. The 2009 budget has still not been finalized by Congress.
The White House's 2010 budget plan would also increase the Commodity Futures Trading Commission's budget by 44 percent to plug regulatory gaps including supervision of financial derivatives.
As Congress examines how to reform financial services regulation this year, some experts believe lawmakers may consider merging the SEC and CFTC or finding ways for the agencies to work more closely together.
The budget proposal for fiscal 2010, that begins October 1, also provides more resources for additional Federal Bureau of Investigation agents to investigate mortgage fraud and white collar crime.
The document gives broad outlines of the White House's spending priorities and a more detailed budget request will be released in April. Congress approves the U.S. budget and usually makes many changes to the presidential proposal.
Some lawmakers have called for more SEC funding, citing Bernard Madoff's alleged $50 billion fraud, weak oversight of derivatives blamed for exacerbating the credit crisis and the unraveling of investment banks.
The Obama budget plan said the SEC would build staff and technology resources in 2010 and pursue a risk-based regulatory structure to better detect fraud and strengthen markets.
The agency has been criticized for not chasing tips on the Madoff fraud. New SEC Chairman Mary Schapiro, who has told Congress she needs resources to catch lawbreakers, said she appreciates the additional funds "that would help strengthen and reinvigorate the SEC and rededicate our commitment to the protection of investors."
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(Reporting by Rachelle Younglai; Editing by Lisa Von Ahn and Tim Dobbyn)