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from Breakingviews:

Obama’s got 99 problems and the SEC isn’t one

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By Daniel Indiviglio and Agnes T. Crane
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

With apologies to Jay Z, U.S. President Barack Obama’s got 99 problems, but the Securities and Exchange Commission isn’t one. That’s the message sent by his pick of Elisse Walter as the watchdog’s new boss. For those who’d like to see a tougher beat cop on Wall Street, it’s not a particularly inspiring choice. But installing a bureaucrat reflects Obama’s need to conserve political capital for bigger fights on fiscal issues and his cabinet rather than attempting an upgrade of the SEC’s import.

Departing Chairman Mary Schapiro took the helm of an agency in disarray in 2009. The SEC missed red flags leading up to the financial crisis, the collapse of two of the biggest firms within its purview - Lehman Brothers and Bear Stearns - and the massive Ponzi scheme perpetrated by Bernie Madoff. Schapiro pursued more enforcement actions than her predecessors, including a record $550 million settlement with Goldman Sachs. But she never pushed through what would have been her signature achievement: reform of money market funds.

That left Treasury Secretary Timothy Geithner to pick up the pieces. Ceding such ground to others agencies casts doubt on the commission’s potency - and future heft. Walter doesn’t appear any better positioned than her predecessor in this sense: Though she was Schapiro’s ally on the money market issue, she also failed to persuade her colleagues to move the rule forward.

from The Great Debate:

Can the SEC ever improve?

The U.S. Securities and Exchange Commission’s case against Citigroup’s Brian Stoker, a director in the bank’s Global Markets group, seemed clear-cut. Stoker structured and marketed an investment portfolio consisting of credit default swaps. The agency accused him of misrepresenting deal terms and defrauding investors for not disclosing the bank’s bet against the portfolio while pitching the investment vehicle to customers. But when it came to trial earlier this summer, the government could not prove that Stoker knew or should have known that the pitches were misleading, and the jury didn’t convict.

It’s hardly surprising. The SEC’s failure to secure a guilty verdict is one more sign that the commission still has not climbed out of the morass in which it was mired for most of the Bush years. The agency tasked with overseeing some 5,000 broker-dealers, 10,000 investor-advisers, 10,000 hedge funds, and 12,000 public companies, as well as mutual funds, the exchanges and even the rating agencies, is ailing because of outdated rules, systems and structures.

from Summit Notebook:

So how plugged in is the SEC chair? (technologically speaking)

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Securities and Exchange Commission Chairman Mary Schapiro says her agency has its work cut out to compete with the massive amounts of money that private firms, policed by the SEC, pour into the latest technology.

"Can we keep up with Wall Street? I think we have a fighting chance. We'll never have, under any circumstances, the kind of budgets that would allow us to spend a billion dollars a year on technology as some firms do, I mean that's just not going to happen, and I totally understand that," she said at the Reuters Future Face of Finance Summit. FINANCE-SUMMIT/SCHAPIRO

from Summit Notebook:

Against high Hill drama, SEC chief mum on Goldman

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First of all, Securities and Exchange Commission Chairman Mary Schapiro would not talk about Goldman Sachs.

There was no drawing her out. The head of the agency that filed a civil fraud lawsuit charging that Goldman misled investors would not say a word about the case. GOLDMAN/

from Summit Notebook:

Reuters set to spotlight financial regulation in DC

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FINANCIAL-REGULATION/OBAMA
The fight over new rules that will dramatically change Wall Street and financial markets is approaching the finish line in Washington, with both lawmakers and the financial industry making last-ditch efforts to put their stamp on the reform effort. Reuters will be hearing from the key players in the debate on April 26-29 during the 2010 Global Financial Regulation Summit.

Top regulators, watchdogs, lawmakers and stakeholders will provide their perspectives on how this landmark legislation will impact banks, investors, traders and consumers. The talks will focus in on proposals for a strong new consumer agency, strict oversight of derivatives and attempts to end the perception that some financial firms are “too big to fail.”

from Summit Notebook:

Reuters set to spotlight financial regulation in DC

FINANCIAL-REGULATION/OBAMA
The fight over new rules that will dramatically change Wall Street and financial markets is approaching the finish line in Washington, with both lawmakers and the financial industry making last-ditch efforts to put their stamp on the reform effort. Reuters will be hearing from the key players in the debate on April 26-29 during the 2010 Reuters Global Financial Regulation Summit.

Top regulators, watchdogs, lawmakers and stakeholders will provide their perspectives on how this landmark legislation will impact banks, investors, traders and consumers. The talks will focus in on proposals for a strong new consumer agency, strict oversight of derivatives and attempts to end the perception that some financial firms are “too big to fail.”

from The Great Debate:

Investor confidence not too helpful

Once again someone in charge -- Mary Schapiro of the U.S. Securities and Exchange Commission this time --  is going on about how they are making changes in order to "preserve investor confidence."

As if this were in some way a good thing.

I would feel a whole lot better if instead the SEC were talking about making investors more sceptical.

from Financial Regulatory Forum:

Top regulators to face U.S. financial crisis panel

By Kevin Drawbaugh

WASHINGTON, Jan 14 (Reuters) - Senior U.S. regulators, including outspoken Federal Deposit Insurance Corp Chairman Sheila Bair, will tell their side of the story on Thursday to a commission examining the origins of the 2008 financial crisis.

The 10-member panel, in its first public hearing, heard a tale of misjudgments and regret from top Wall Street bankers on Wednesday, but did not get an outright apology or any new explanations for the debacle that shook world markets.

from Financial Regulatory Forum:

US SEC proposes “effective” ban on naked access

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By Rachelle Younglai and Jonathan Spicer

WASHINGTON/NEW YORK, Jan 13 (Reuters) - U.S. securities regulators proposed rules on Wednesday that would require more supervision of unlicensed high-frequency traders who gain unfettered, or "naked," access to public markets.

The Securities and Exchange Commission voted for a proposal that would require brokerages that rent out their access to the markets to have rules in place to protect against potential mishaps from unlicensed traders.

from Financial Regulatory Forum:

US SEC mulls plans to safeguard naked market access

By Rachelle Younglai

WASHINGTON, Jan 12 (Reuters) - U.S. securities regulators are mulling a proposal that would require more supervision of unlicensed traders who gain unfettered access to public markets, two people familiar with the plan said on Tuesday.

Regulators are considering a proposal that would require brokerages that rent out their access to the markets to have rules in place to protect the markets against potential mishaps from unlicensed traders, the two people said.

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