Yesterday, SEC Chair Mary Jo White gave testimony before a subcommittee of the House Committee on Appropriations in support of President Obama's fiscal year 2015 budget request for the SEC to receive $1.7 billion. As she has done in other recent statements on the SEC's budget, Chair White warned that the SEC needs a meaningful increase over its FY 2014 budget of $1.35 billion. The FY 2014 budget of $1.35 billion was just a 2% increase over the SEC's FY 2013 budget of $1.321 billion.
Among other things, Chair White noted that an increased SEC budget is needed to properly regulate a current hot issue: "today's high-tech, high-speed markets" that have come under great scrutiny following a 60 Minutes report and the release of Michael Lewis' new book on the topic, Flash Boys. She also said that the requested budget level would allow the SEC to properly bolster examination coverage for investment advisers and strengthen its enforcement program.
White explained that the FY 2015 budget request of $1.7 billion would allow the SEC to hire an additional 639 staff and enhance its information technology. Specifically, in the enforcement and examination areas, Chair White testified the SEC's initiatives would include:
- hiring 316 additional staff to the examination program in its Office of Compliance Inspections and Examinations;
- increasing the SEC's "human and technological resources" in areas including the review and analysis of the many thousands of tips that come in to the agency each year;
- increasing resources for complex investigations, such as financial reporting and auditing misconduct cases;
- increasing resources for litigation, which is on the rise as the SEC focuses more extensively on individual wrongdoing and continues to demand admissions in certain cases;
- hiring 126 new Enforcement staff, including additional legal, accounting, and industry specialized experts, primarily for investigations and litigation; and
- building the capability to permit the electronic transmittal of data for litigation and investigatory matters, and implementing a document management system for Enforcement's internal case files.