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SEC: investors protected
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May 27, 1997: 9:01 p.m. ET
Commission chairman says system does good job of rooting out fraud
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NEW YORK (CNNfn) - Last week, the Justice Department and the Securities and Exchange Commission announced charges had been filed against 17 rogue brokers for alleged fraudulent activity.
The charges were the latest to come out of an investigation the two agencies launched together in 1995 which identified fraud ranging from cheating the elderly and disabled to using false account statements.
Appearing Tuesday on CNN's "Moneyline With Lou Dobbs," SEC Chairman Arthur Levitt defended the current system of enforcement and pledged that the SEC will continue to ensure investors are protected.
"I think when the markets are as expansive and explosive as they are now, there's always concern to see that investors get an even break. We've got to see that markets get regulated as they have in the past to protect investor interests," he said.
Levitt said the United States has the strongest, safest and most liquid market in the world. However, he said criminals will occasionally seek to take advantage of the system.
"Ninety-five percent of brokers are good, honest, effective, hardworking people. Those that aren't, the NASD and the stock exchanges do a good job of rooting out. In cases where brokers have ripped off the public or stolen funds, the commission, working with the Justice Department, has been sending brokers to jail -- which is exactly where they belong. We will continue to make that a priority," he said.
Discussions are currently underway on reforming the Glass-Steagall Act, which specifies which activities banks and brokerage firms can participate in and which agencies are responsible for enforcement. Levitt said he expected the reforms to give large exchanges the ability to introduce newer products and services.
Regarding the Internet's influence on the stock market, Levitt said it has had both positive and negative effects. On the positive side, it has introduced more people to investing, but it has also caused some investors take chances they might not have taken before. (304K WAV) or (304K AIFF)
The SEC and Justice Dept. have cautioned investors to carefully investigate any solicitations sent over the Internet to ensure that they are from reputable companies.
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