GOP To Shady Traders - Wall Street Is Open For Business
Budget Means About One Investigator for Every 100 Billion Invested by Public
February 22, 2011
Menendez: “The GOP’s Failure to Plan is a Plan for Failure”
New Jersey – With ponzi-scheme leader Bernard Madoff stating this past week that banks must have known about his billion-dollar treachery, U.S. Senator Robert Menendez (D-New Jersey) today called on Congress to reject Republican efforts to gut the very agencies responsible for holding Wall Street banks accountable. Menendez, a member of the Senate Banking Committee, said that the Republican budget would mean each government investigator would have the task of patrolling almost $100 billion in investments – a feat certain to lead to another major economic swindle.
In a letter to the leaders of the Senate Appropriations Committee, Menendez called for Congress to provide Wall Street regulators, including investigators at the Securities and Exchange Commission and Commodity Futures Trading Commission, with the tools they need to hold Wall Street accountable and protect middle class investments.
Specifically, the Republican budget proposes cuts to the current budget for both the SEC and the CFTC of 2 percent and 34 percent, respectively. Meanwhile President Obama is proposing an increase to $1.43 billion for the SEC and $308 million for the CFTC.
These GOP cuts come at the same time as the new Wall Street reform requires new responsibilities. The SEC and the CFTC are now responsible for oversight of the over-the-counter derivatives market and hedge fund advisors; greater disclosure regarding asset-backed securities; and creation of a new whistleblower program. In fact, the CFTC was already responsible for overseeing actively traded futures and options contracts on U.S. exchanges, which have increased nine-fold in the last decade.
KEY DETAILS HIDDEN IN THE GOP BUDGET PROPOSALS
• President Obama’s request is 5 times smaller than the size of the $8.3 billion profit generated by one investment bank in 2010 alone. And that was during a bad year.
• Six years ago, the SEC’s funding was sufficient to provide 19 examiners for a trillion dollars in investment under management. Today, that figure stands at 12 examiners per trillion dollars.
• CFTC staffing has remained level over the decade while the trading volume has increased five-fold.
• In 2010, the SEC returned $2.2 billion to harmed investors, twice the agency’s budget.
• Federal deficit is not affected by the funding levels Congress sets for the SEC and possibly the CFTC.
Senator Menendez said, “The Republican budget tells every shady trader and book cooker that Wall Street is open for business. New Jersey families and I understand the need for shared sacrifice. But no one should support opening our markets to every swindler in the world. Investors deserve more, and I plan to stand up to these powerful special interests, not turn a blind eye to them.”
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