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Mix-Ansicht- Republikaner schränken Befugnisse v. Staatsanwälten zugunsten wallstreet ein - kingsolomon, 10.07.2003, 23:13
Republikaner schränken Befugnisse v. Staatsanwälten zugunsten wallstreet ein
-->House Panel Votes to Limit Power of Spitzer, States
July 10 (Bloomberg) -- A House panel voted to limit the power of New York Attorney General Eliot Spitzer and other state securities regulators to negotiate agreements with executives or companies that violate U.S. securities laws.
The House Financial Services capital markets subcommittee approved the Republican-backed restriction on a 24-18 vote. Democrats criticized the amendment, saying it would have prevented the $1.4 billion global settlement over alleged biased stock research negotiated by Spitzer, other state officials and the Securities and Exchange Commission with 10 securities firms.
The House panel's action ''shreds one of the most basic protections that investors have against fraudulent activities, and is an attack on the 75 percent of Americans who own stock,'' Spitzer, a Democrat, said in a written statement.
The amendment to a bill to provide greater restitution to defrauded investors was proposed by Representative Richard Baker, chairman of the House Financial Services capital markets subcommittee.
Baker, a Louisiana Republican, said the measure merely elaborated on federal law that prevents state legislatures from changing federal securities laws. If legislatures can't do it, then state regulators shouldn't be able to do it either through negotiated settlements, Baker said.
Baker's Concerns
Baker has previously objected to Spitzer's action in the global settlement with Citigroup Inc., Morgan Stanley and eight rival securities firms. In an April 2002 letter to then-SEC Chairman Harvey Pitt, Baker wrote that Spitzer sought ''to achieve blanket rulemaking and policy changes that would impact the entire national securities markets.''
Baker wrote that ''public policy is best achieved through an open and deliberative process that welcomes diverse perspectives and the free exchange of ideas, not through dictates arrived at by the few and outside the public's view.''
Representative Paul Kanjorski of Pennsylvania, the subcommittee's ranking Democrat, said today the amendment would eviscerate state powers to enforce the law and keep the securities markets honest.
The amendment, ''materially changes the balance of federal authority and decreases the rights of the states under federal law,'' Kanjorski said, urging hearings and more time to consider the ramifications of Baker's proposal.
State Prohibitions
Spitzer said the amendment would preclude the states from ''entering into any voluntary agreements with investment banking firms that include any structural reforms to protect individual investors.''
The subcommittee approved the overall restitution bill as amended and sent it to the House Financial Services Committee. From there, the bill would still need approval from the House, the Senate and President George W. Bush to become law.
The subcommittee also adopted by voice vote an amendment that would let states voluntarily send money from settlements with securities law violators to an SEC restitution fund for defrauded investors. The restitution bill, drafted by Baker and Financial Services Committee Chairman Michael Oxley, an Ohio Republican, would have required states to turn over the money in cases where the agreement went beyond federal securities law.
Another amendment adopted by voice vote would require the SEC to conduct a ''thorough review'' every year of the financial disclosures of the 250 largest corporations to find any confusing or unclear statements on issues of interest to investors and require clarification.
If the SEC had taken such action with Enron Corp. before it collapsed, ''we would have discovered Enron's problems much sooner,'' said Representative Brad Sherman, a California Democrat and author of the amendment.
Seizing Yachts, Mansions
The overall bill would expand the SEC's ''Fair Fund'' to return money to defrauded investors and boost the agency's power to seize mansions, yachts and artwork from corporate executives who break the law. It would supersede laws in several states, including Florida and Texas, which allow defendants to keep their homes regardless of legal findings against them.
The SEC could increase fines to as much as $2 million from the current $600,000 maximum. It also would let persons, such as attorneys, give information to the SEC about company activities without having to give it to other parties, such as those involved in a lawsuit against a company.
The bill would give the SEC nationwide subpoena power in civil cases brought in federal court, allow it to hire private attorneys to help with such functions as debt collection, and authorize criminal prosecutors to share grand jury information in limited cases with SEC staff.
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