The U.S. Securities and Exchange Commission (SEC) is defending its lack of enforcement actions against the executives of the major financial services institutions at the center of the 2008 economic crash because it has not been able to find evidence that they made the disastrous business decisions regarding mortgage-backed securities.
According to a Bloomberg News report, SEC Enforcement Director Robert Khuzami used a C-Span interview to explain that the corporate executives were not the ones giving the green light to the problematic transactions that contributed to the economy’s collapse.
‘Deal-specific matters often aren’t vetted at the senior corporate levels,’ Khuzami said. ‘You’re not going to see as many prosecutions of those folks for those types of violations as you might otherwise.’
Khuzami also noted that the SEC has taken enforcement action against more than 55 senior executives at several subprime lending companies and is pursuing litigation against several companies and former Fannie Mae and Freddie Mac executives.
However, he added that his agency’s enforcement endeavors are hampered by a tight budget.
‘We are significantly underfunded,’ he said. ‘We are responsible for regulating 35,000 entities, and yet we are about the size of the D.C. police force.’