| WASHINGTON, June 13
WASHINGTON, June 13 A U.S. lawmaker on Friday
pressed Securities and Exchange Commission Chair Mary Jo White
for answers about why her agency continues granting regulatory
waivers to companies that break the law, and urged the agency to
stop the practice.
In a letter to White, Ohio Democratic Senator Sherrod Brown
said he wants her to explain what steps, if any, she has taken
to examine the SEC's policies for granting regulatory waivers
and whether she plans to make changes.
"Removing privileges enjoyed by large firms will promote
better behavior, increase accountability, and demonstrate to the
financial markets that certain firms do not enjoy special
treatment by virtue of their size," wrote Brown.
Brown is a member of the Senate Banking Committee and was
the panel's lone lawmaker to vote against bringing White's
confirmation to the Senate floor.
An SEC spokesman declined to comment immediately on Brown's
Brown is at least the third federal lawmaker now to weigh in
on a growing debate over the SEC's policy on granting certain
waivers. The main waiver at issue involves "well-known seasoned
issuer," or WKSI, waivers to companies.
A WKSI waiver is a coveted tag that lets companies raise
money immediately through securities offerings without waiting
for SEC approval.
Companies convicted of crimes or found liable for fraud can
lose the status, but the SEC can agree to provide the company a
waiver so they retain the WKSI tag.
In April, two SEC commissioners dissented over a waiver
granted to the Royal Bank of Scotland Group Plc after
one of its units struck a criminal plea deal over manipulation
of the Libor benchmark interest rate.
One of those commissioners, Democrat Kara Stein, released a
scathing statement that questioned the SEC's practice of
routinely granting such waivers and questioning whether it is
leading to a policy of "too big to bar."
That has since prompted other lawmakers to start speaking
out, including Massachusetts Democratic Senator Elizabeth Warren
and California Democratic Congresswoman Maxine Waters.
Earlier this week, Waters tried to include a provision in a
broader piece of draft legislation that would prohibit the SEC
from granting WKSI waivers to companies convicted of crimes or
found liable for fraud in the past three years.
The Republican-controlled House Financial Services
Committee, however, rejected her request to include her proposal
in the bill.
White has not discussed her views much on the subject, just
saying the agency applies the WKSI waiver policy "faithfully and
Shortly before Stein publicly criticized the Royal Bank of
Scotland waiver, the SEC also slightly toughened its policy on
how waivers are doled out by requiring companies convicted of
crimes to show "good cause" why they should retain their WKSI
Afterwards, one of her fellow commissioners, Republican Dan
Gallagher, also issued a statement disagreeing with the change
(Reporting by Sarah N. Lynch)