SEC needs to suspend rulemaking, reps say

Randy NeugebauerMembers of the House Financial Services Committee have asked the Securities and Exchange Commission to suspend any important or controversial initiatives, including significant rulemakings, until a commissioner is chosen to fill a currently vacant position.

Congressmen Randy Neugebauer (R-Tex.) and Scott Garrett (R-N.J.) sent a letter to SEC Chairman Mary Schapiro this week stressing the importance of refilling the fifth seat on the Commission in order to ensure that its rulemaking and decision making process is deliberative and has a diverse set of perspectives.

“As chairman you control the agenda of the SEC,” the Congressman wrote in the letter. “We are writing to make clear our expectation that the Commission will refrain from undertaking any important or controversial initiatives, including significant rulemakings, until there are once again five commissioners.”

President Obama has nominated Daniel Gallagher to fill the seat, which was recently vacated by Commissioner Kathleen Casey but he has not yet been confirmed by the Senate.  

Sen. David Vitter (R-La.) has committed to blocking the nomination, along with current commissioner Luis Aguilar’s nomination for a second term, until the SEC announces whether victims of R. Allen Stanford’s alleged Ponzi scheme are eligible for Securities Investor Protection Corp. compensation.

“We’ve known for some time that the SEC waited far too long to take action against Allen Stanford, and now they’re dragging their feet in responding to the victims,” Vitter said, the Wall Street Journal reports. “I will continue to hold them accountable – including holding these nominations – until these fraud victims get an up-or-down answer from the SEC.”

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