February 5, 2008 / 6:41 PM / 12 years ago

SEC forms office to pay back wronged investors

WASHINGTON (Reuters) - The Securities and Exchange Commission said on Tuesday it has created a new office in the agency to quickly distribute financial penalties to wronged investors.

The Office of Collections and Distributions will be used to dole out more than $5 billion the SEC has recovered from securities law violators, the agency said.

“The Commission’s strong commitment to recovering money from wrongdoers and returning it to investors is amply demonstrated by the more than $2 billion we distributed last year,” said Chairman Cox in a statement.

The SEC has the authority to collect and distribute the funds due to the post-Enron Sarbanes-Oxley corporate reform laws of 2002. Before the Fair Funds provision of that act, the SEC sent financial penalties collected from its enforcement actions to the U.S. Treasury.

The SEC said it has used this authority to distribute more than $3.5 billion to investors. It said the new office will help cut red tape and the cost of distributing the money.

Richard D’Anna, who was previously senior vice president at 1st Bridgehouse Securities, has joined the SEC as director of the new office. Lynn Powalski, who has been an assistant director for collections and distributions within the SEC’s enforcement division, will serve as the new office’s deputy director.

Reporting by Karey Wutkowski, editing by Richard Chang

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