![]() Small-business owners had money they were counting on to pay their employees frozen by their bankers, and even bigger companies weren't immune. Some cases involved money that thousands of consumers had invested based on the advice of their financial advisers to pay tuition bills, make down payments on houses or meet routine monthly expenses. The infractions that led to the waiver applications raided Americans' pocketbooks and savings accounts. At the same time, the fact that the SEC could someday deny one is a major weapon in its arsenal, experts said. Securities experts say companies wouldn't apply for waivers if they didn't think their applications would be granted. The waivers typically are part of the settlements that the commission negotiates with companies caught violating federal law. Loads and undermined by SEC leaders reluctant to impose significant punishment. The Government Accountability Office, Congress' investigative arm, reported this year that SEC enforcement workers have felt overwhelmed by their case. The SEC declined to comment in detail on its decisions.ĭespite the securities frauds of the past decade, the SEC has languished in a period of stagnant enforcement. In fact, the last time the SEC's staff could recall a waiver application being turned down was 1978. Although the companies were punished in other ways, they were spared from what some claimed would be "severe and irreparable hardships." SEC rules permit corporate lawbreakers to apply for waivers from one of the agency's harshest penalties - effectively shuttering the violator's mutual fund operations - but regulators never rejected any of these companies' applications. In the eyes of federal regulators, many Wall Street companies are too big to punish.ĭuring the past three years, some of the nation's largest financial companies have been accused by the government of cheating or misleading clients and ripping off tens of thousands of consumers of their investments.ĭespite these findings, these financial giants got - sometimes repeatedly - special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses.Īmong the more than dozen companies that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America Corp., Citigroup Inc.
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