Trade-Offs in Dodd-Frank Repeal Proposal Won’t Prevent Bad Actors States Investment Management Counsel in Law360

On Tuesday, June 7, House Financial Services Committee Chairman Hensarling (R-Texas) outlined a plan to replace the Dodd-Frank Act, with proposals to increase the ability of the Securities and Exchange Commission to impose penalties. While such measures might win bipartisan support, “increased penalties likely wouldn't protect consumers or strengthen financial markets,” outlined investment management counsel David Tittsworth (Washington, D.C.) in Law360. Penalty increases previously passed by Congress, which include Sarbanes-Oxley Act and Dodd-Frank, have not proved to be deterrents, as evidenced by the number of enforcement cases the SEC brings yearly, detailed Mr. Tittsworth. Furthermore, allowing administrative cases to be removed to federal courts from the SEC’s in-house court could potentially place pressure the already crowded federal court system, continued Mr. Tittsworth. And, this “[won’t] necessarily affect the SEC's inclination or disinclination to bring more cases or different types of cases," Mr. Tittsworth concluded.