Reuters: Regulatory News: Senator Warren's rebuke of regulators goes viral

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Senator Warren's rebuke of regulators goes viral Feb 19th 2013, 19:17 Tue Feb 19, 2013 2:17pm EST * Liberal group demands that SEC take big banks to trial * Petition comes after Senator Warren scolds regulators * Warren demanded to know when banks had been brought to trial By Sarah N. Lynch WASHINGTON, Feb 19 (Reuters) - Democratic Senator Elizabeth Warren's strong criticism of U.S. financial regulators last week has inspired a liberal political action committee to launch an online petition urging the Securities and Exchange Commission to take more Wall Street banks to trial. The petition, introduced by the Progressive Change Campaign Committee on Sunday, came a few days after the freshman senator from Massachusetts made her debut on the influential Senate Banking Committee. In an exchange that drew applause from protesters in the audience, Warren demanded to know the last time banking and financial market regulators had taken Wall Street banks to trial, as opposed to settling the cases. "I'm really concerned that too-big-to-fail has become too-big-for-trial," Warren told the regulators. After the hearing, Warren's staff posted clips of the exchange on YouTube that soon went viral. So far, three separate postings of a version of the clip have collectively received more than 1 million hits. (To see the YouTube video, click on) The Progressive Change Campaign Committee, which helped Warren raise more than $1.6 million in her 2012 campaign to defeat Republican incumbent Scott Brown, posted its petition to the SEC on Sunday. The petition, which urges the SEC to end its practice of "too big for trial," garnered more than 10,000 signatures in the first 24 hours, a number that has climbed to more than 16,000, according to Matt Wall, a spokesman for the group. Wall said he expects the group to deliver the petition to the SEC in the "near future." Last week SEC Chairman Elisse Walter told reporters after the hearing that she does not believe the agency should bring banks to trial if it can obtain relief through a settlement. She added that the SEC, whose budget must be approved by Congress, needs to take account of its resources in deciding which cases to settle and which to take to trial. On Tuesday, SEC spokesman John Nester said the agency is "fully prepared to go to trial every time" it files a suit. However, he added, "There's no reason under our authority to delay justice and financial relief for investors when we can get it all without a trial." A spokesman for Warren did not have an immediate comment in response to the petition. SETTLEMENTS UNDER ATTACK The SEC's settlements have been under the heavy scrutiny in recent years. The agency is currently appealing a judge's rejection of a proposed $285 million settlement with Citigroup. In refusing to approve the accord, the judge challenged the SEC's practice of letting companies settle without admitting or denying allegations. Many of the SEC's most notable cases against banks arising from the financial crisis have resulted in settlements. One prominent settlement was a $550 million deal with Goldman Sachs Group Inc over allegations it misled investors in a subprime mortgage product. When the SEC has taken banks to trial, it has been met with mixed results. Some successes included one last week when the SEC won a $110,500 judgment against Morgan Keegan in connection with its sale of auction-rate securities. A court ruled that Morgan Keegan was negligent, but it did not find that the firm intentionally defrauded investors. However, other high-profile cases have not been decisive victories. In November, a jury rejected civil fraud charges against Reserve Primary Fund founder Bruce Bent, whose money market fund "broke the buck" during the financial crisis after its heavy exposure to Lehman Brothers prompted an investor sell-off. His son, Bruce Bent II, was cleared of knowingly violating securities laws but was convicted on one count of negligence. Two of the Bents' companies were also found liable on some charges. In one of the biggest blows to the SEC, a jury in July threw out a civil fraud case against former Citigroup manager Brian Stoker over allegations he misled investors in a pool of mortgages. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions