Kelley Calls White House SEC Budget Request The Minimum Necessary to Protect Consumers

05/04/2011

5/4/11: NTEU National President Colleen Kelley today called on a key Senate Appropriations subcommittee to provide the agency with at least the $1.4 billion in fiscal 2012 funding contained in the administration’s budget proposal for the coming fiscal year.

NTEU “believes that the president’s request is the minimum needed to make sure the SEC is able to do its job effectively,” President Kelley told the Senate Appropriations Subcommittee on Financial Services.

“A $33 trillion industry of 35,000 separate entities is policed for fraud and illegal activities by a mere 3,800 employees of the SEC,” Kelley told the subcommittee.

During the recent period of almost flat funding for the SEC, she said, investor trading volume had more than doubled, noting that since 2003, the number of investment advisors has grown by roughly 50 percent, as have the number of funds they manage. Meanwhile, SEC staff has only recently returned to its 2005 levels.

President Kelley emphasized the SEC has significant duties under new consumer protection and financial regulatory reform legislation and needs funding to hire the new personnel necessary to fully implement that law.

“While the SEC is an appropriated agency, its funding is offset by the fees collected from the securities industry,” Kelley said. “Because these fees offset the entire SEC budget, proper funding of the SEC does not contribute to the deficit.”

In 2010, the SEC returned $2.2 billion to cheated investors—more than double its budget. “Congress should not be penny-wise and pound-foolish when it comes to protecting the investments of American consumers, only to see the victimized lose retirement investments or lifetime savings,” she said.

Adequate SEC funding will enable the agency “to retain and attract staff with skill sets vital to keeping pace with rapidly changing markets, and to identify systemic risks that may be created by entities subject to SEC regulation,” Kelley added.