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Panel backs giving SEC more power

By Associated Press
November 5, 2009

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WASHINGTON - The House Financial Services Committee voted yesterday to give regulators more power and money to police major players in the stock market, four months after Bernard Madoff was sentenced to 150 years in prison for the biggest investment scam in history.

The 41-to-28 vote was the panel’s latest move to try to rein in Wall Street. It would give the Securities and Exchange Commission new powers, including the ability to offer bounty money to tipsters and the power to bar violators from employment in any securities-related industry. The bill also would double the SEC’s budget in the next five years.

Representative Paul Kanjorski, Democrat of Pennsylvania, sponsored the legislation after leading the panel’s investigation into the government’s failure to uncover Madoff’s massive fraud scheme for nearly two decades.

The proposal was part of a broader effort to tighten rules governing financial institutions. The full House was expected to vote on the bill and related proposals in early December.

The committee has also voted for new restrictions on investment rating agencies and to require oversight of hedge funds.

The panel also wants a new agency dedicated to protecting consumers from fraud and abuse on credit cards, mortgages and other popular financial products.