Consumer Group Slams Bill Weakening SEC’s Enforcement
A prominent consumer group has told Congress that a bill designed to stymie the SEC’s use of in-house administrative panels against financial firms is hypocritical, ThinkAdvisor writes.
Introduced in December by Rep. Scott Garrett, R.-N.J., chair of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, the so-called Due Process Restoration Act would let firms opt out of the SEC’s administrative proceedings, the publication writes.
Garrett said earlier this month that the powers handed to the SEC by the 2010 Dodd-Frank Act led to overuse of in-house panels in enforcement cases instead of pursuing cases in federal courts as dictated by the Constitution, ThinkAdvisor writes.
His bill, he said, is “about protecting every American’s due process rights and their ability to have a fair trial,” ThinkAdvisor writes.
But consumer protection group Americans for Financial Reform, which represents around 200 national, state and local organizations, says financial companies seeking the measure are pursuing double standards, according to a letter from the group to the House cited by ThinkAdvisor.
The group takes issue with the idea that firms want to raise the burden of proof in administrative cases, including allowing two appeal processes, while they use “forced arbitration” in contracts with their own clients, the publication writes.
“It is astoundingly hypocritical to seek still further extraordinary legal protections for companies accused of wrongdoing while the same companies refuse to grant their own customers the basic legal right to access the courts,” the group writes, according to ThinkAdvisor.
To that end, Americans for Financial Reform stand behind an amendment proposed by Rep. Keith Ellison, D-Minn., and Rep. Stephen Lynch, D-Mass., that would deny special protection as outlined by Garret’s bill to companies who use forced arbitration against customers, ThinkAdvisor writes.