The SEC chief is sticking to her guns on why the regulator needs to hire 676 more people in the new fiscal year to fight everything from Ponzi schemes to the vagaries of money market funds.
Mary Schapiro told the financial services panel of the House appropriations committee that the SEC enforcement and examination programs will get to hire most of the new staffers.
That makes a lot of sense, since it helps the regulator pursue its primary mandate of watching securities firms and stepping in when there's a problem.
There's plenty for those people to do. After all, the SEC ran on a budget of $1.3 billion last year, but obtained $2.8 billion in penalties, Schapiro says.
Enforcement actions against advisors surged 30% to a record 146 last year while broker-dealer enforcement activity increased 60% to 112.
Hiring another 191 people in enforcement would let the SEC catch up with the backlog of cases, theoretically getting investors who've been cheated since the 2008 credit crunch quicker satisfaction.
And adding 110 people to the trading, investment management, and risk divisions will help the SEC achieve its broadened post-Dodd-Frank responsibilities.
All of this is good.
But Schapiro says she wants to allocate $100 million to technology -- another good thing, in theory.
Maybe $50 million will come from the SEC's reserve funds, or maybe the entire $100 million will come out of the $245 million budget increase she wants Congress to approve. Her testimony gets vague on this point.
Give her the benefit of the doubt and say the entire $100 million comes out of the budget increase. She doesn't say anything about wanting to spend any of the $245 million on anything but technology and people, so that leaves Congress with the impression that $145 million will go straight to SEC HR.
That, in turn, would entail spending $215,000 on average for each of the 676 new employees, which is absurd by any standard.
It's more likely that the new hires will come in at slightly lower total compensation levels and the rest of the money will go toward salary increases for existing staff or to other SEC purposes.
That may or may not be what an already unsympathetic Congress wants to hear.
Meanwhile, Schapiro keeps stressing the importance of revamping the money markets and is silent on who will oversee street-level advisors.