The House Financial Services Committee passed legislation yesterday that would strengthen the SECs powers in detecting fraud.
The Securities Fraud Deterrence and Investor Restitution Act (H.R. 2179), would permit the SEC to more easily collect fines and funds from those who have broken the law, as well as increase the amount of funds the SEC would be able to return to injured investors.
State laws would no longer be able to be used to protect ill-gotten gains, and the SEC would be able to obtain bank records in securities violations cases, as well as increase the Commissions access to grand jury information. Finally, its powers of subpoena would be enhanced.
The legislations "anti-Spitzer" clauses, which would have diluted states regulators powers, was reported to have been eliminated and replaced with a strengthening of the SECs rights.
The bill also includes amendments that would increase communication between the SEC and the states and prohibit funds closed to new investments to collect 12b-1 fees.