Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, introduced legislation Thursday to rein in the Securities and Exchange Commission’s ability to grant waivers to financial institutions that have broken the law.
The Bad Actor Disqualification Act of 2017 ensures that the SEC “protects investors from bad actors by implementing a rigorous, fair, and public process for waiving automatic disqualification provisions in the law,” Waters said.
Waters continued that “by waiving the consequences for bad actors the SEC is sending the wrong message.”
The SEC, she said, “should not automatically give those who break the law a free pass by allowing them to continue to conduct business as usual. This commonsense legislation will subject waiver requests to public scrutiny and robust SEC review so that the law protects investors, the markets, and the public. No one is above the law, including large financial firms.”
Certain provisions in securities laws “allow law-abiding companies to engage in activities with less oversight, fewer disclosure requirements, and limited liability,” she said.
However, companies that have been convicted of certain felonies and misdemeanors or are determined to have violated anti-fraud provisions of securities laws are automatically disqualified from such benefits, unless they obtain a waiver from the Commission.