New York Times editor Gretchen Morgenson argues that investors need a more muscular Securities and Exchange Commission. Even though billions of dollars have been paid by financial firms to settle regulatory and legal actions related to the mortgage crisis, most of that money went to the Department of Treasury or states. The SEC has collected $2.6 billion in penalties and disgorgement of profits in its actions, but class actions on behalf of stockholders and debtholders has recovered much more for investors, Morgenson reports. In six cases involving both private lawsuits and SEC action, the SEC recovered $400 million, while private plaintiffs recovered $3.8 billion. The agency "is clearly hamstrung in its efforts to generate recoveries on behalf of harmed investors" and should be authorized by Congress to be able to recover penalties equal to investor losses, Morgenson argues. Investors also should be able to bring private actions udner the securities laws, she argues.
Lawyer and Legal Journalist
