Greg,
You've been awful quiet as of late. Heard from the SEC recently?
Ryan
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dailynews.yahoo.com
SEC Says It Strains To Fight Internet Fraud
WASHINGTON (Reuters) - Federal securities regulators are straining under the weight of policing the Internet for securities fraud, lacking both the manpower and the tools to do the job, a top regulator said Monday.
''Policing the vast universe of the Internet is unquestionably our greatest challenge today,'' Richard Walker, head of the Securities and Exchange Commission's Enforcement Division, said in a speech at the National Press Club.
''What makes this challenge even tougher for us is that we do not have available to us new or additional resources to do the job,'' he added.
But he warned that the SEC will continue to vigorously pursue online fraud.
''While it is true that our resources are strained by the growth of Internet fraud, it would be a mistake to underestimate our commitment to attacking fraud on the Net,'' Walker said. ''We can and we will spare no effort to fight fraud in this new medium.''
The SEC has come under criticism for being slow and ill-equipped to handle Internet fraud. It has filed about 66 enforcement cases since 1995, a number which critics say is too low given the scope of the problem.
Out of more than 800 enforcement staffers nationwide, the SEC has about 125 who patrol the Web looking for various forms of fraud, ranging from stock touters to pyramid schemes, according to a recent speech in Washington by John Stark, head of the SEC's three-person Office of Internet Enforcement.
That office, which is looking to hire two more people, oversees the SEC's cyberforce which, using Pentium-powered computers with high-speed transmission lines, is given special training to spot Internet fraud.
The commission gets anywhere from 200-300 tips a day from people who e-mail the SEC at its website, www.sec.gov, which also offers basic investor education tips.
Indeed, online securities fraud in the 90's has replaced insider trading in the 80's as the SEC's toughest challenge to date, Walker said. ''Policing insider trading was perhaps our greatest enforcement challenge a decade ago,'' he said. But now Internet fraud ''comes on top of all the other traditional types of fraud that have occupied our staff full time in the past.''
While his agency still continues to file insider trading charges today against the movers and shakers on Wall Street, Walker said it has had to do so less frequently.
''With limited exceptions, no longer do we see insider trading in large magnitude by investment bankers and other Wall Street professionals, though we still bring cases against such persons.''
SEC Chairman Arthur Levitt will lay out in more detail what his agency is doing to combat Internet fraud in a speech early next month at the National Press Club, Walker said.
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