U.S. Representative Frank Wolf (R-Va) Holds Hearing On Fiscal Year 2006 Securities and Exchange Commission Appropriations

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U.S. Representative Frank Wolf (R-Va) Holds Hearing On Fiscal Year 2006 Securities and Exchange Commission Appropriations

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HOUSE COMMITTEE ON APPROPRIATIONS: SUBCOMMITTEE ON SCIENCE, STATE, JUSTICE, COMMERCE AND RELATED AGENCIES HOLDS A HEARING ON FISCAL YEAR 2006 SECURITIES AND EXCHANGE COMMISSION APPROPRIATIONS

MARCH 11, 2005

SPEAKERS: U.S. REPRESENTATIVE FRANK WOLF (R-VA) CHAIRMAN U.S. REPRESENTATIVE CHARLES H. TAYLOR (R-NC) U.S. REPRESENTATIVE MARK STEVEN KIRK (R-IL) U.S. REPRESENTATIVE DAVE WELDON (R-FL) U.S. REPRESENTATIVE VIRGIL GOODE (R-VA) U.S. REPRESENTATIVE RAY LAHOOD (R-IL) U.S. REPRESENTATIVE JOHN ABNEY CULBERSON (R-TX) U.S. REPRESENTATIVE RODNEY ALEXANDER (R-LA) U.S. REPRESENTATIVE JERRY LEWIS (R-CA) EX OFFICIO

U.S. REPRESENTATIVE ALAN MOLLOHAN (D-WV) RANKING MEMBER U.S. REPRESENTATIVE JOSE E. SERRANO (D-NY) U.S. REPRESENTATIVE ROBERT E. (BUD) CRAMER (D-AL) U.S. REPRESENTATIVE PATRICK J. KENNEDY (D-RI) U.S. REPRESENTATIVE CHAKA FATTAH (D-PA) U.S. REPRESENTATIVE DAVID R. OBEY (D-WI) EX OFFICIO

WITNESSES: WILLIAM H. DONALDSON, CHAIRMAN, U.S. SECURITIES AND EXCHANGE COMMISSION

[*] WOLF: The committee will come to order.

Thank you, Chairman Donaldson. I apologize for the delay. The Science Foundation hearing went on longer than we thought, which is, actually, a good thing. It shows a lot of people are interested in it.

I want to thank you for appearing before the subcommittee this afternoon to discuss the Securities and Exchange Commission's fiscal year 2006 budget.

As I've said before, you are leading the SEC during a very difficult time for the nation's securities markets. The American public continues to look to you to restore confidence in corporate America and in our markets, and I would just urge you to be firm and not to be intimidated, and I hope you know what I mean. If you don't, I can go into detail.

Your mission is to protect investors, and, after what we've been through, I think it's important to make sure that we're protecting, you know, their -- capitalism, a free-market economy, is a great economy, it's the way to go, but we need an honesty and integrity image.

So to protect investors and maintain the integrity of the securities market, it remains difficult, and this committee recognizes your efforts to ensure the future success of the markets. Investors must have the confidence that companies are accurately disclosing financial information.

When you see some of the stories of some of the people who've lost their life savings in Enron and some of the other companies -- so what you're doing, I just want to stress, is very important.

Auditors are functioning, we want to make sure, independently, and investment advisers are not inappropriately influenced by investment activities.

Over the last year, the SEC tackled difficult issues surrounding the mutual fund industry, including a package of mutual fund governance rules that require an independent chair and a board comprised mainly of independent directors, a rule requiring investment advisers to adopt codes of ethics and a proposed rule to require certain hedge fund advisers to register with the SEC.

With the 21 percent staff growth that occurred in fiscal year 2004 in the enforcement programs, the...

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