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Regulation and Compliance > Federal Regulation > SEC

SEC, CFTC Should Improve Fine Collection

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WASHINGTON (–The Securities and Exchange Commission and the Commodity Futures Trading Commission both need to collect more of the fines the two groups levy, according to a report by the U.S. General Accounting Office.

The SEC collected just 40% of fines levied from 1997 through 2002, while the CFTC collected 45% of fines in the same period, according to a GAO report. That doesn’t compare well with most other oversight groups, such as the National Association of Securities Dealers, which collected 66% of fines, the Chicago Mercantile Exchange, which collected 96% of fines, and the New York Stock Exchange, which collected 100% of fines.

The GAO noted in a summary of its report that the SEC and CFTC have improved their efforts, but they need to make better use of the U.S. Treasury’s collection services, which may aid them with collecting delinquent fines, particularly cases going way back. The SEC “has not developed a formal strategy for referring older cases, reducing the likelihood of collecting monies on what could be more than a billion dollars of delinquent debt,” the GAO states in its report.

“Further impeding collection efforts, SEC does not have a reliable system for tracking monies owed on these older cases and therefore could not determine which cases were not being referred to [a Treasury collection program],” the GAO report states. The GAO says the SEC has devised a plan for tracking cases but hasn’t created a time frame for putting it into place.

In the 1997 through 2002 period, the SEC collected US$190 million of the US$480 in fines levied, while the CFTC collected US$161 million of the US$358 million levied. The collection rates rise to 94% for the SEC and 99% for the CFTC when looking just at cases that are closed, the GAO says.

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