Risk & Compliance

Cox Seeks $1B Boost from Congress

SEC chairman, with full agenda, says he expects the agency's budget to rise that steeply during its 2009 fiscal year.
Sarah JohnsonApril 16, 2008

Securities and Exchange Commission chairman Christopher Cox asked Congress to approve his nearly $1 billion budget request for fiscal year 2009.

If lawmakers agree the SEC needs its first budget increase in three years, the commission will have realized a roughly 4 percent increase and be able to keep its staff levels the same as fiscal year 2007, Cox testified during an appropriations hearing before a House subcommittee on Wednesday. The SEC currently employs about 3,470 full-timers.

“The request will allow the SEC to fully maintain our current program of strong enforcement, examinations and inspections, disclosure review, and regulation,” Cox said.

In his speech, Cox went through the list of actions the SEC undertook in 2007, to outline how the “tax-paying public gets significant value” from the regulator. His highlights include the SEC’s enforcement actions in 30 cases involving fraud against seniors and charges against executives accused of backdating stock option grants. He also mentioned the SEC’s issuance of management guidance for the Sarbanes-Oxley Act’s internal-control provision and its plans to study the cost benefits of the regulation this year.

“Overall in FY 2007, the SEC had one of the most productive years in its history, aggressively pursuing wrongdoing and tackling fundamental reforms in the securities markets, all on behalf of America’s investors,” Cox said.

According to Cox, the commission has a full agenda for 2008. Among them are a look at the regulatory gaps in investment banks that could have led to Bear Stearns’ failure and rapid sale to JP Morgan Chase. The commission is also working on new rules for its oversight of the credit rating agencies, investigating possible fraud and breaches of fiduciary duty in after the subprime-mortgage market fallout, and expanding the staff’s knowledge of international financial reporting standards. The SEC is expected to release an IFRS-related proposal this year that could allow U.S. companies to either choose between IFRS and U.S. GAAP, or either phase out GAAP altogether.