House Panel Passes Investor Protection Act
November 4, 2009 (PLANSPONSOR.com) - A U.S. House
committee on Wednesday approved the Investor Protection Act,
which backers say will strengthen the powers of the
Securities and Exchange Commission (SEC) in regulating the
financial markets.
A news release from the House Financial Services
Committee said the vote on H.R. 3817, sponsored by
Representative Paul E. Kanjorski (D-Pennsylvania), was 41
to 28. Kanjorski is chairman of the Subcommittee on
Capital Markets, Insurance, and Government Sponsored
Enterprises.
Among the bill's provisions is what the news
release called a "harmonized standard" for
fiduciary responsibilities of broker-dealers and
investment advisers. The bill also doubles the SEC's
funding over five years and provides new enforcement
power and regulatory authority.
The measure fixes what backers say are holes in the
Securities Investor Protection Act, which returns money
to customers of insolvent fraudulent broker-dealers, and
the Public Company Accounting Oversight Board (PCAOB).
The PCAOB has lacked the powers it needed to examine the
auditors of broker-dealers, according to the
announcement.
"In order to maintain a sound economy, we must
improve investor protection and confidence," said
Kanjorski, in the announcement. "The Investor
Protection Act aims to achieve these goals while also
improving enforcement powers at the U.S. Securities and
Exchange Commission and implementing a fiduciary standard
for broker-dealers and investment advisers to ensure that
customers' interests are at the forefront of
investment recommendations."
The bill also provides a "bounty program"
to create incentives for whistleblowers to identify
wrongdoing in the securities markets and ends mandatory
arbitration requirements for defrauded investors seeking
redress.
Fred Schneyer
editors@plansponsor.com