MJP –
Two institutions each paid twenty million dollars to the SEC for recordkeeping violations, bringing the total amount charged to a staggering forty-nine million dollars.
The United States Securities and Exchange Commission (SEC) has settled charges against six credit rating organizations for violations of recordkeeping regulations with a total settlement amounting to more than $49 million in civil penalties.
The following rating agencies were named by the SEC as having serious shortcomings in their handling of electronic communications: Demotech, HR Ratings de Mexico, S&P Global Ratings, Fitch Ratings, and Moody’s Investors Service.
Fitch will fork over $8 million, Moody’s $20 million, and S&P $10 million.
Contributions of $100,000 will be made by Demotech, $250,000 by HR Ratings de México, and $1 million by A.M. Best.
In the past, the SEC has levied fines against many companies for inaccurate record-keeping, most notably about the use of WhatsApp and other messaging apps by employees.
The agencies’ legal teams have yet to address the media’s demands for comment.
There has been a groundswell of social media discontent among retail investors regarding regulating agencies like FINRA and the DTCC, with many calling on the SEC to probe these groups for possible conflicts of interest.
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The SEC has come under fire from billionaire Mark Cuban, who claims, “I wouldn’t trust them to do the right thing ever” since the agency is biased towards Wall Street.
Mark Cuban, a wealthy investor, harshly criticized the United States Securities and Exchange Commission (SEC) during an AMA on Reddit’s WallStreetBets community in February 2021.
The SEC is a disaster,” Cuban wrote in a post to his verified account.
Never would I put my faith in them to act morally.
It’s an agency that was founded by lawyers to win disputes, not to serve investors’ best interests.
He went on to say that the SEC was biased toward Wall Street and didn’t care about regular people.
Cuban stated that the SEC should set clear regulations against insider trading and market manipulation if it was serious about protecting investors.
Instead, he asserted that “they would rather litigate to regulate,” implying that the SEC’s preference for rule development through litigation benefits Wall Street at the expense of the public.
The SEC is still being watched today.
The present chair, Gary Gensler, has been pushing for tougher rules to safeguard investors and increase market transparency.
The hedge fund and banking sectors are divided about these activities, despite their stated goal of addressing new risks.
Some feel the new regulations are too complicated.
For decades, retail investors have been plagued by problems that the SEC chair has failed to address. These problems largely stem from the fact that hedge funds, which are often short on stocks, manipulate stock prices.
An ongoing discussion about the function and efficacy of the SEC is highlighted by Mark Cuban’s criticism of the agency.
The SEC’s ability to adapt to modern financial issues depends on its ability to strike a balance between facilitating markets and enforcing regulations.
Its ability to regain the confidence of retail investors and adapt to changing market conditions is an open question, but the success of its future endeavors depends on it.
