September 11, 2008 / 10:47 PM / 11 years ago

House votes to bolster SEC enforcement power

WASHINGTON (Reuters) - The House of Representatives passed a bill on Thursday to strengthen the enforcement arm of the U.S. Securities and Exchange Commission.

The bill would give the investor protection agency broader authority to impose financial penalties and more explicit ability to ban securities law violators from other parts of the financial industry.

“Policing the markets and keeping investors’ money safe has never been more important and so this legislation comes at a critical time,” said SEC Chairman Christopher Cox in a statement.

The Securities Act of 2008 is sponsored by Rep. Paul Kanjorski, a Democrat from Pennsylvania. There is not yet a companion bill in the Senate.

The legislation includes a number of measures the SEC has been actively seeking, including the authority to obtain financial penalties from wrongdoers in SEC administrative proceedings without needing to file a separate civil action in federal court.

It would also allow the SEC to prevent individuals who commit fraud in one sector of the securities industry from conducting business in other parts of the securities market.

Further, it would for the first time make nationwide service of subpoenas available in civil actions filed in federal court.

The bill has the support of the North American Securities Administrators Association, an association representing 67 state, provincial and territorial securities administrators.

The SEC said the bill would eliminate unnecessary duplication and extraneous responsibilities for the agency’s enforcement staff.

Reporting by Karey Wutkowski and Rachelle Younglai

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