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SEC’s Paredes says Dodd-Frank regulatory regime over-extensive

Troy Paredes

Securities and Exchange Commissioner Troy Paredes said during a recent speech that the regulations mandated by the 2010 Dodd-Frank Act are overreaching.

“The present wave of regulation will prove to be excessive, unduly burdening and restricting our financial system and suppressing private sector innovation, entrepreneurism and competition at the expense of our country’s economic growth and global competitiveness,” Paredes said at the 66th National Conference of the Society of Corporate Secretaries & Governance Professionals last week, Compliance Week reports.

Paredes noted one provision, Section 954 of Dodd-Frank, that mandates that a company must reclaim any incentive payments from current or former company executives who received incentive compensation within the three years before the firm was required to re-report its financials.

In regards to the provision, Paredes offered the example of “an executive who has worked diligently and honestly at a company that has robust financial controls and top-notch procedures and systems” but “may nonetheless have to pay back a considerable portion of his or her compensation if the company has to restate because of an accounting error,” according to Compliance Week.

Paredes said that the provision could be “problematic,” as it raises issues regarding compensation arrangements and a possible shift from incentive to guaranteed pay.

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