SEC May Gain Expanded Powers to Prohibit Broker Pay, Wrongdoers

The U.S. Securities and Exchange Commission would gain power under an Obama administration proposal to ban pay practices at brokerages and investment advisers and prevent individuals from working in the industry.

The Treasury Department sent Congress legislation yesterday that would let the SEC prohibit “sales practices, conflicts of interest and compensation schemes” deemed harmful to investors. The measure lets the agency remove individuals who violate rules from all aspects of the industry, rather than a specific segment such as selling securities or managing money.

President Barack Obama’s SEC proposal is part of the overhaul of financial regulations in response to the worst economic crisis since the Great Depression. Lawmakers have vilified securities firms for selling investors unsuitable products and basing pay on how many transactions bankers execute without regard to whether deals succeed in the long term. baca selengkapnya