The Securities and Exchange Commission, which has said it lacked sufficient staff to catch many of corporate Americas wrongdoers over the last few years, may lose $30 million from its fiscal 2004 budget because it did not hire new staff quickly enough this year, the Financial Times reports.
This comes at a time when the agency is under immense scrutiny because of its failure to detect rampant improper trading practices in the mutual fund industry, while New York Attorney General Eliot Spitzer got the investigation rolling by uncovering wrongdoing. This followed fiascos at Enron and WorldCom in which the wrongdoing went undetected until it was too late for investors to recover losses.
Reports on the U.S. House Appropriations Committee Web site indicate that the agencys 2004 budget would be $811.5 million, a $66 million boost from 2003. However, $120 million of that budget comes from funds the SEC was unable to spend in 2003 and had to return to the Treasury.
Congress had increased the SECs fiscal 2003 budget so that the agency could address the personnel shortage. However, the SEC failed to make all the hires it planned to in the fiscal year, which ended in September. As of Monday, the SEC had hired 70% of the 850 people it had slated to bring on board in fiscal 2003, an agency spokeswoman told FT. The rest are supposed to be hired in the upcoming months.
The spokeswoman said the fault did not entirely lay with the SEC, as Congress approved the budget late and waived particular hiring regulations. She also noted that the strains of bringing on and training new staff played into the agency not meeting its goal.