Lawmakers seeking to overhaul the Securities and Exchange Commission may get new fuel for their arguments when the agency's internal watchdog releases a set of reports this month, the Wall Street Journal reported Thursday.
The SEC inspector general's reports include allegations that regulators destroyed documents relating to initial investigations; that conflicts of interest influenced payments to Bernie Maddoff’s victims; that the SEC and Wall Street are too cozy; and that one former SEC official received an unusual financial package.
SEC inspector general David Kotz did not comment on the findings of the reports to the Journal, but he did say that "there's a lot of congressional interest in our findings." He added that he “wouldn’t be happy” if the reports became partisan fuel for attacks on the SEC budget.
Republicans on Capitol Hill have argued that the SEC needs a major overhaul before it receives any more funding. Democrats counter that Republicans are just trying to undermine last year’s Dodd-Frank financial reform act.
SEC Chairman Mary Schapiro will face questioning from Republicans seeking to alter the SEC structure and prevent new regulations at a House Financial Services Committee hearing next week. The panel’s oversight subcommittee plans to hold a hearing on the Madoff finding when Kotz releases his report, a House Republican aide told the Journal.