House Democrats Urge Funding Boost for Wall Street’s ‘Cop on the Beat’



House Financial Services Committee Chairwoman Maxine Waters is calling on Congress to increase funding for Securities and Exchange Commission (SEC) oversight of Wall Street’s “regulatory and market structure weak points.”

With SEC Chairman Gary Gensler signaling stepped-up enforcement of public companies and other SEC registrants, Democrats on Capitol Hill are leveraging their majority status to ensure the agency has the resources to meet its new chairman’s aggressive oversight mandate.

Rep. Brad Sherman, D-Calif., co-signed Waters’ letter to the leaders of the House Appropriations Committee calling for more SEC funding. Sherman is chairman of the Financial Services Committee’s Investor Protection, Entrepreneurship and Capital Markets Subcommittee.

“We urge you to fully fund Wall Street’s cop on the beat,” Waters and Sherman wrote. “In addition to providing the SEC with the funding needed to tackle the impacts of the COVID-19 pandemic, it is imperative that the SEC be given the resources to address other regulatory and market structure weak points. The January 2021 GameStop controversy highlighted these issues and raised serious questions regarding existing rules governing short sales and related disclosures, as well as the conflicts between the practice of payment for order flow and firms’ best execution obligations. It also raised important questions about the efficacy of anti-market manipulation laws and whether technology and social media have outpaced regulation in a manner that leaves investors and the markets exposed to unnecessary risks.”

The lawmakers said a funding boost would also allow the SEC to finalize new rules requiring that public companies provide “comprehensive environmental, social and governance disclosures, including disclosures related to climate risk, human capital management, human rights, political spending, tax disclosures and corporate board diversity.”

The Waters-Sherman letter can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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