SCENARIO12

Assume that you have been appointed by the Securities and Exchange Commission (SEC) to an advisory committee whose task is to make recommendations how the SEC can improve its detection of major investor frauds. The current economic and political situations are such that the SEC will not receive a significant increase of funds from Congress to hire more enforcement personnel.'

What are some of the key issues which should be explored to determine what recommendations are suitable?

Please note :

Indeed, Congress evidently has not appropriated sufficient funds for the SEC to adequately undertake the agency's enhanced responsibilities mandated by the Dodd-Frank Act of 2010. See Hilzenath, Budget Freeze Hampers Oversight, SEC Chair Says, Wash. Post, Feb. 5, 2011, at A10; Holzer, SEC Watchdog in a Plea for Cash, Wall St. J., Feb. 11, at C6. Note that Section 922 of the Dodd-Frank Act provides that whistleblowers are entitled from ten percent to thirty percent of any penalties paid exceeding $1 million in SEC enforcement actions when the whistleblower provided original information that significantly contributed to the successful enforcement action. It remains to be seen whether this provision will induce whistleblowers to reveal frauds to the SEC, thereby helping the Commission to aptly enforce the securities laws.