As funding for the SEC becomes a prominent issue for Congress, the case for additional funding may be founded on the Bernard Madoff scandal. The SEC will likely use the case in the effort to be awarded the additional funds it says it needs. It has requested a $1.32 billion budget for fiscal 2013. Congress is pushing back, preferring to award the SEC an increase of only $50 million.
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The House Appropriations Committee defended its position that the SEC doesn’t deserve more money, saying management at the SEC needs to be improved instead of the additional funding it is requesting.
The question of whether the SEC should have picked up on the Madoff scandal earlier in its development is one that officials are asking FINRA, as well. One official says that FINRA should have reviewed internal controls at Madoff’s firm and another says that FINRA did not have jurisdiction.
The Madoff incident has exposed the fragmented realities of the regulatory industry. The industry and Congress have struggled for over two years to pass legislation
that would rectify the problem. Even the Dodd-Frank Act has not been implemented fully and the Bachus-McCarthy bill is still under commentary.