NEWS RELEASE
Committee on Energy and Commerce Democrats
Congressman John D. Dingell, Ranking Member

COX TO DINGELL: UPGRADING PENALTY COLLECTIONS AND RETURNING MORE MONEY
TO INVESTORS “A TOP PRIORITY”

Washington, D.C. -- Rep. John D. Dingell (D-MI), Ranking Member of the House Committee on Energy and Commerce, today released a letter dated November 14, 2005, from Securities and Exchange Commission (SEC) Chairman Christopher Cox, acknowledging problems with tracking and management of penalties and disgorgement collection, and the operation of the Fair Funds program mandated by the Sarbanes-Oxley Act.

Chairman Cox states that, “Since I arrived just 90 days ago, I have focused intently on fixing the problems with our collection program. I wholeheartedly agree with the findings in the GAO report, and the GAO’s recommendations. I have made it a top priority to implement these recommendations.”

In that regard, Cox says that the SEC is developing reports that will allow the agency to monitor its collections program worldwide; is preparing additional training programs for staff; and is updating its existing case tracking system (CATS) to include financial data to directly aid collection tracking efforts. This letter responds to the October 3, 2005, letter from Dingell, releasing the August 31, 2005, report, SEC and CFTC Penalties: Continued Progress Made in Collection Efforts, but Greater SEC Management Attention Is Needed, GAO-05-670, which was prepared at the request of Reps. Dingell, Barney Frank (D-MA), and Paul Kanjorski (D-PA).

GAO also found that defrauded investors have received only about one percent of the billions of dollars collected for them by securities regulators since 2000. Frank and Kanjorski have called for hearings on Fair Fund failures.

Chairman Cox promises, “I am attacking this problem head on” while noting that “the process of returning money to injured investors has, in my view, been rendered needlessly complex.”

In releasing Cox’s letter, Dingell said: “I am delighted that the SEC is devoting a great deal of energy to addressing these shortcomings, some of which were identified by GAO in previous reports. Returning funds to harmed investors is an important part of the agency’s investor protection mission. Failure is not an option.”

See the November 14, 2005, letter from SEC Chairman Cox to Rep. Dingell.