At long last, the SEC has taken measures to electronically streamline the tips and complaints it receives. Information, no matter how it is received by the SEC, will now enter a searchable and cross-referenced database that is to be ready for use by the end of the year. Sadly, this constitutes a major change from standard operating procedure. Notably, the SEC received multiple tips regarding Bernard Madoff’s scheme. The commission launched two different investigations at separate SEC offices which were mutually unaware of each others’ efforts—the NEXT Madoff will not be so lucky.
Enforcement director Robert Khuzami has taken his title seriously, although as with every bureaucratic process it has taken some time. Streamlining the SEC complaint process and the Dodd-Frank Bill’s whistleblower incentives allow for effective self-policing, which is essential in a field where (as previous experience shows) the SEC can’t possibly oversee every company and transaction effectively.
This shift in focus to efficiency and incentivizing self-regulation are a major step forward. But the Commission must continue to vigilently maintain its commitment to a more practical, nimble and effective form of regulation.
Assisted by David Martin