Former chairs of the Securities and Exchange Commission say that Congress’s delays in approving full-year spending year after year have hurt the agency’s ability to hire top talent.
At no time in this decade has the SEC known at the October 1 start of its fiscal year how much money it can spend for the next 12 months.
The budget hold ups hurt hiring (and other things), said Mary Schapiro (who served as SEC chair from 2009 to 2012).
"Perennial uncertainty in funding of the SEC makes it exponentially more difficult for the agency to fulfill its mission of protecting investors, ensuring the transparency and integrity of the capital markets and facilitating capital formation,” Schapiro told Financial Advisor. “It continues to amaze me that the world's largest capital markets have a regulator whose funding is so volatile and uncertain, year in and year out.” (Schapiro is currently a corporate governance and compliance consultant at the Promontory Financial Group.)
Another ex-chair, Elisse Walter, told FA the funding delay was a barrier in her effort to hire the best when she headed the agency from December 2012 to April 2013 and served as a commissioner from 2008 to 2013.
“It’s hard for them to accept a job when there may be a hiring freeze,” said Walter, who was recently appointed to the agency’s Investor Advisory Committee.
A freeze during Schapiro’s tenure lasted roughly from April 2010 to 2011, when the agency was still trying to recover from lapses in the run-up to the 2008 financial crisis.
Former chair Arthur Levitt agreed with the others that the years of funding delays are causing some top professionals to stay away.
He said attracting the best wasn’t a problem when he led the SEC from 1993 to 1998 because its reputation was strong and Congress routinely approved year-long budgets.
“True patriots came in,” he said.