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WASHINGTON – The House Financial Services Committee voted Wednesday to give federal regulators more power and money to police major players in the stock market, four months after Bernard Madoff was sentenced for the biggest investment scam in history.
The 41-28 vote was the panel’s latest move to try to rein in abuses on Wall Street. It would give the Securities and Exchange Commission new enforcement powers, including the ability to offer bounty money to tipsters on fraud cases and the power to bar violators of the law from employment in any securities-related industry.
The bill also would double the SEC’s budget in the next five years.
Rep. Paul Kanjorski sponsored the legislation after leading the panel’s investigation into the government’s failure to uncover Madoff’s massive fraud scheme for nearly two decades. Madoff was sentenced in June to 150 years in prison.
“In the last five years, there’s been a significant change and a greater sophistication in the financial service industry than has ever happened in the history of mankind,” said Kanjorski, a Pennsylvania Democrat. “So we’re going to have to change fast.”
The proposal was part of a broader effort by the committee to tighten rules governing financial institutions after last year’s market crisis. The full House is expected to vote on the bill and related proposals in early December.
The committee also has voted to impose new restrictions on investment rating agencies and require oversight of hedge funds and other large pools of private capital.
