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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-30-11 07:11 AM
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20. SEC Pushes to Toughen Penalties for Offenders

The Securities and Exchange Commission, bruised by a judge's rejection of a proposed settlement with Citigroup Inc., sought the power to impose much-larger penalties on financial firms and individuals that commit fraud. SEC Chairman Mary Schapiro, in a letter sent to senators late Monday, asked Congress to pursue legislation that changes the legal formulas used by the agency to calculate penalties. Ms. Schapiro's proposals would allow the SEC to impose fines up to nine times greater than the maximum currently allowed by U.S. law. The changes would include increasing the maximum penalty to triple the net profit made as a result of the alleged wrongdoing, up from the current limit of no more than the profit. Ms. Schapiro also sought power to further triple penalties for repeat offenders, or firms or individuals who have been the subject of another SEC enforcement action or criminal conviction in the previous five years.

The move came after U.S. District Judge Jed S. Rakoff spurned a $285 million settlement between the SEC and Citigroup. That pact addressed civil-fraud charges that the New York firm failed to disclose to investors its role in selecting investments in a $1 billion mortgage-bond deal that it was simultaneously betting would fail. Judge Rakoff ordered the matter to go to trial next summer, saying the settlement was "neither fair, nor reasonable, nor adequate, nor in the public interest." Citigroup neither admitted nor denied the SEC's findings. A Citigroup spokeswoman declined to comment Tuesday.

If the toughened powers sought by Ms. Schapiro had been used in the Citigroup case, the maximum penalty would jump to $1.44 billion from $160 million. That compares with the penalty Citigroup agreed to pay of $95 million as part of the larger settlement, a penalty denounced as "pocket change" by the judge in his order Monday.

Ms. Schapiro's push faces uncertain prospects. Since she took over the agency, the SEC has been under fire from Republican critics in Congress over everything from financial controls to handling of insider-trading referrals. As a result, lawmakers might be reluctant to hand the SEC more power, though some favor a tougher stance by the agency in dealings with Wall Street...In her letter, Ms. Schapiro said the SEC is constrained by statute from seeking penalties that match investor losses. She also warned that the agency can't adequately take into consideration the severity of misconduct or its impact on victims. The letter was sent to Sens. Jack Reed (D., R.I.) and Mike Crapo (R., Idaho), the top members of the Senate banking subcommittee on securities...The SEC already can seek triple damages in insider-trading cases. Expanding that power to other civil cases "would allow the commission to address situations where the actual pecuniary gain to the violator is relatively small compared to the nature or magnitude of the wrongdoing," Ms. Schapiro wrote. Another proposed change would allow the SEC to calculate penalties based on the amount of investor losses incurred as a result of misconduct. A further change would allow penalties of as much as $1 million per violation for individuals and $10 million for financial firms, an increase from current caps of $150,000 and $725,000, respectively. Sen. Reed said he is working on legislation to give the SEC additional firepower. "If they don't have the tools to effectively police the market and protect investors, then we need to give them those tools," Mr. Reed said in a statement. The legislation also would increase the SEC's ability to sanction companies and individuals that repeatedly violate securities laws. Current law "does not provide the commission with adequate tools to deter this category of violators," Ms. Schapiro wrote in the letter.

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  -STOCK MARKET WATCH, Wednesday, November 30, 2011 Pale Blue Dot  Nov-30-11 06:00 AM   #0 
  - Today's Reports  Pale Blue Dot   Nov-30-11 06:01 AM   #1 
  - Pending home sales rise 10.4% in October  Roland99   Nov-30-11 09:02 AM   #86 
  - Nov. Chicago PMI climbs to 62.6 vs. 58.4 (7 month high. 26 months in a row of expansion)  Roland99   Nov-30-11 09:03 AM   #87 
  - Private-sector jobs rise 206,000: ADP  Roland99   Nov-30-11 09:03 AM   #88 
  - Oil falls to near $99 after US supplies increase  Pale Blue Dot   Nov-30-11 06:02 AM   #2 
  - It's China's turn to kick the can! U.S. stock futures rise after China move  Pale Blue Dot   Nov-30-11 06:05 AM   #3 
  - U.S. stock futures rally on central bank action (DJIA futures up 235!)  Roland99   Nov-30-11 07:33 AM   #34 
  - morning...  xchrom   Nov-30-11 06:20 AM   #4 
  - chilly one here  Roland99   Nov-30-11 06:22 AM   #5 
  - it's chilly here too.  xchrom   Nov-30-11 06:37 AM   #8 
  - It snowed  Demeter   Nov-30-11 07:02 AM   #16 
     - We had snow too  DemReadingDU   Nov-30-11 07:06 AM   #17 
     - oy -- the slushy stuff...  xchrom   Nov-30-11 07:08 AM   #18 
        - I'm hoping there will be sun to clear it away  Demeter   Nov-30-11 07:13 AM   #21 
           - the older i get -- the less i like wind.  xchrom   Nov-30-11 07:29 AM   #27 
              - There seems to be so much more wind these days, too  Demeter   Nov-30-11 08:14 AM   #58 
  - europe: Eurozone crisis: finance ministers turn to the IMF - live  xchrom   Nov-30-11 06:33 AM   #6 
  - Why an IMF rescue plan for Italy won't work  xchrom   Nov-30-11 06:36 AM   #7 
  - IMF rescue of Italy will spark global uprising  xchrom   Nov-30-11 07:11 AM   #19 
     - I thought you might apprciate the remarks of this guy:  dixiegrrrrl   Nov-30-11 05:44 PM   #120 
  - Cairn fails to strike oil off Greenland  xchrom   Nov-30-11 06:39 AM   #9 
  - Cairn's Greenland oil failure under fire  xchrom   Nov-30-11 06:41 AM   #10 
  - Life after the end of economic growth  xchrom   Nov-30-11 06:44 AM   #11 
  - Growth for the sake of growth  Tansy_Gold   Nov-30-11 06:50 AM   #12 
  - Amen, Sister  bread_and_roses   Nov-30-11 06:59 AM   #13 
  - Indeed  DemReadingDU   Nov-30-11 07:27 AM   #26 
     - "Perhaps the paradigm of easy credit should be re-thought also."  Tansy_Gold   Nov-30-11 08:26 AM   #64 
        - It will be forced eventually  DemReadingDU   Nov-30-11 08:32 AM   #67 
           - or by  Tansy_Gold   Nov-30-11 11:17 AM   #112 
  - +1  xchrom   Nov-30-11 07:00 AM   #14 
  - weird dupe. nt  xchrom   Nov-30-11 07:00 AM   #15 
  - Yet, corporations continue to ignore this reality.  Loge23   Nov-30-11 10:16 AM   #107 
  - Eurozone unemployment rate rises to 10.3%  xchrom   Nov-30-11 07:16 AM   #23 
  - "Austerity" will do that to ya  Demeter   Nov-30-11 07:40 AM   #38 
  - critical period of 10 days to complete and conclude the crisis response of the European Union  Ghost Dog   Nov-30-11 07:24 AM   #25 
  - btw, GD, "TB" = thoroughbred and I don't bet  bread_and_roses   Nov-30-11 09:40 AM   #99 
  - Sikorski: German inaction scarier than Germans in action  xchrom   Nov-30-11 07:44 AM   #41 
  - Mariano Rajoy starts talks with the unions and employers  xchrom   Nov-30-11 07:48 AM   #42 
  - Death of a currency as eurogeddon approaches  Demeter   Nov-30-11 08:51 AM   #78 
     - IMF drawing up 500bn package to save Italy, Spain and the euro  Demeter   Nov-30-11 08:53 AM   #80 
     - LOL LOL LOL....  AnneD   Nov-30-11 11:51 AM   #113 
  - SEC Pushes to Toughen Penalties for Offenders  Demeter   Nov-30-11 07:11 AM   #20 
  - africa: Uganda struggles to make oil a blessing  xchrom   Nov-30-11 07:13 AM   #22 
  - Hence, the US Military "Advisors" Obama sent recently  Demeter   Nov-30-11 07:43 AM   #39 
     - +1  xchrom   Nov-30-11 08:20 AM   #60 
  - south asia: India's growth rate drops to slowest in two years  xchrom   Nov-30-11 07:18 AM   #24 
  - India PM Manmohan Singh battles retail reform crisis  xchrom   Nov-30-11 07:30 AM   #31 
  - Gold adds Rs 220, silver Rs 150 on seasonal demand  xchrom   Nov-30-11 08:00 AM   #48 
  - Sensex closes 115 pts up on value buying  xchrom   Nov-30-11 08:21 AM   #61 
  - Fed, global central banks move to boost financial system  Ghost Dog   Nov-30-11 07:29 AM   #28 
  - Liquidty injection in USD "at present"  Ghost Dog   Nov-30-11 07:38 AM   #36 
  - And what did they get for it?  Demeter   Nov-30-11 07:43 AM   #40 
     - Of course, and tomorrow another injection increase. and on and on  DemReadingDU   Nov-30-11 08:00 AM   #50 
     - Collapse avoidance?  Ghost Dog   Nov-30-11 08:16 AM   #59 
        - temporarily avoidance of collapse  DemReadingDU   Nov-30-11 08:28 AM   #65 
        - 2008 redux only without a Lehman/AIG (yet) n/t  Po_d Mainiac   Nov-30-11 09:57 AM   #101 
  - China's central bank cuts reserve ratios to boost sagging economy  Ghost Dog   Nov-30-11 08:26 AM   #63 
  - On FX intervention and the ECB/SMP  Roland99   Nov-30-11 08:48 AM   #77 
     - As Far As the People are concerned, it's ALL offensive  Demeter   Nov-30-11 09:23 AM   #92 
  - Are corporate balance sheets really the strongest in history?  rfranklin   Nov-30-11 07:30 AM   #29 
  - OT but interesting: "...the Tea Party ...carries the seeds of its own destruction"  bread_and_roses   Nov-30-11 07:30 AM   #30 
  - I wish I could believe it  Demeter   Nov-30-11 07:38 AM   #37 
  - NY Times: Support for Tea Party Falls in Strongholds, Polls Show  rfranklin   Nov-30-11 07:51 AM   #44 
  - NYT--Not My Most Trusted Source on Politics  Demeter   Nov-30-11 08:36 AM   #69 
     - It's basically reporting on analysis by Pew Research...  rfranklin   Nov-30-11 08:54 AM   #81 
  - Not all genetic mutations...  AnneD   Nov-30-11 08:44 AM   #74 
     - LOL, good one! (n/t)  bread_and_roses   Nov-30-11 09:34 AM   #97 
  - Fracking here, fracking there  Demeter   Nov-30-11 07:32 AM   #32 
  - Total to challenge French government decision on shale gas  Demeter   Nov-30-11 07:33 AM   #33 
  - Lower 48 US Sept natgas output hits record high  Demeter   Nov-30-11 07:35 AM   #35 
  - I live in the epicenter of current fracking fight in NorthEast  bread_and_roses   Nov-30-11 08:08 AM   #55 
  - Productivity up in summer while labor costs fell  xchrom   Nov-30-11 07:50 AM   #43 
  - UN scientist: fighting climate change saves costs  xchrom   Nov-30-11 07:53 AM   #45 
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  - BofA, Goldman Sachs, Citigroup Credit Ratings Cut by S&P  Demeter   Nov-30-11 08:00 AM   #49 
  - Whoa..I had missed that!!! thanks for posting.  dixiegrrrrl   Nov-30-11 05:59 PM   #121 
  - Businesses plan for possible end of euro  Demeter   Nov-30-11 08:01 AM   #51 
  - Germany set to overtake Italy in CDS protection  Demeter   Nov-30-11 08:02 AM   #52 
  - China cuts reserve requirements by 50bp  Demeter   Nov-30-11 08:04 AM   #53 
  - Big Four accountants face audit reform  Demeter   Nov-30-11 08:04 AM   #54 
  - Moral hazard will result from ECB bond buying  Demeter   Nov-30-11 08:09 AM   #56 
  - Martin Feldstein: Only Italy can save the euro  Demeter   Nov-30-11 08:12 AM   #57 
  - For a second there....  AnneD   Nov-30-11 09:25 AM   #93 
     - Feldstein is the punchline  Demeter   Nov-30-11 09:27 AM   #95 
        - Igor wasn't that lump on the other si...  AnneD   Nov-30-11 09:50 AM   #100 
  - THOUGHTS FOR THE DAY  Demeter   Nov-30-11 08:25 AM   #62 
  - "Since all our money is loaned onto existence, our economy has to grow exponentially."  Ghost Dog   Nov-30-11 08:32 AM   #66 
  - U.S. to restart construction of nuclear reactors  Demeter   Nov-30-11 08:35 AM   #68 
  - Morning Marketeers....  AnneD   Nov-30-11 08:37 AM   #70 
  - The Capitol One Capitol Building. The Clorox White House.  Roland99   Nov-30-11 04:02 PM   #119 
     - Love the naming rights...  AnneD   Dec-01-11 07:34 AM   #125 
  - To the Moon!  RUMMYisFROSTED   Nov-30-11 08:37 AM   #71 
  - got that right...good grief!  Roland99   Nov-30-11 08:38 AM   #73 
  - Here We Go Again! Up 300+ at Open  Demeter   Nov-30-11 08:38 AM   #72 
  - +370! wow  DemReadingDU   Nov-30-11 08:52 AM   #79 
     - +410  Roland99   Nov-30-11 09:04 AM   #89 
        - Just shy of 12,000  Demeter   Nov-30-11 09:25 AM   #94 
           - Stocks surge thanks to good news on jobs, Europe and China  Demeter   Nov-30-11 09:38 AM   #98 
              - ... and a spike in crude signals the siphon pumps have been activated.  Hugin   Nov-30-11 10:58 AM   #111 
  - Democrat calls for hearing on 'secret' bank loans from Federal Reserve  Demeter   Nov-30-11 08:45 AM   #75 
  - This isn't going well  Turbineguy   Nov-30-11 08:47 AM   #76 
  - It's not going well for anyone except the 1%ers  Demeter   Nov-30-11 09:02 AM   #85 
  - Venezuela brings home gold reserves  Demeter   Nov-30-11 08:54 AM   #82 
  - the 1%ers are bringing the gold closer to home....  MindMover   Nov-30-11 12:11 PM   #114 
  - "I'll Occupy" Recruitment Song: The 99 is Pissed and We Will Not Be Dismissed!  Demeter   Nov-30-11 08:57 AM   #83 
  - Fitch Drops U.S. Debt Outlook To Negative By Kevin Carmichael  Demeter   Nov-30-11 09:00 AM   #84 
  - Who cares what these terrorists think?  plumbob   Nov-30-11 06:27 PM   #124 
  - k&r n/t  Hotler   Nov-30-11 09:04 AM   #90 
  - FOX had a graphic showing US debt-to-equity at 100%.  BadgerKid   Nov-30-11 09:11 AM   #91 
  - We can't really believe any number, anymore  Demeter   Nov-30-11 09:29 AM   #96 
     - and or potentially War.......nt  MindMover   Nov-30-11 06:25 PM   #123 
  - Unsellable Real Estate Assets Threaten Survival of Smaller Spanish Banks  Demeter   Nov-30-11 10:04 AM   #102 
  - First Steps in Reforming the U.S. Financial and Tax System By Michael Hudson  Demeter   Nov-30-11 10:09 AM   #103 
  - Woo-hoo! Stocks up, jobs up, housing up.  Hotler   Nov-30-11 10:13 AM   #104 
  - Ponies!  hamerfan   Nov-30-11 03:43 PM   #118 
  - Were Not Broke: They got bailed out; we got sold out! By Annie Leonard  Demeter   Nov-30-11 10:13 AM   #105 
  - Lobbying Firm's Memo Spells Out Plan to Undermine Occupy Wall Street  Demeter   Nov-30-11 10:15 AM   #106 
  - Weimar Revisited By Uri Avnery  Demeter   Nov-30-11 10:20 AM   #108 
  - Citi Chief Economist Willem Buiter: A Spanish Or Italian Default Could Happen In A Few Short Days  Demeter   Nov-30-11 10:33 AM   #109 
  - Top Favorite Stock Holdings of Congress By Barry Ritholtz  Demeter   Nov-30-11 10:35 AM   #110 
  - Any Suckers left? Come one, come all  RUMMYisFROSTED   Nov-30-11 01:07 PM   #115 
  - lol!  DemReadingDU   Nov-30-11 03:14 PM   #117 
  - The "Safe Harbor" of 12.  RUMMYisFROSTED   Nov-30-11 01:09 PM   #116 
  - +490! Is that yards rushing???? eom.  Hotler   Nov-30-11 06:16 PM   #122 

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