SEC Begs for Dollars
The U.S. Securities and Exchange Commission is looking for cash. As the organization maintains its uphill fight against burgeoning fraud over the Internet, it does so with 25 percent less staff. In the past two years, attorneys, accountants and examiners have left the agency for greener pastures in private practice. For example, attorneys with a couple of years experience make only $66,000 at the watchdog agency.
The magic number appears to be $165 million – $150 million for enforcement work and investor education and another $15 million to pay its attorneys and other professionals above government rates. Proposals sent to Congress on Monday included SEC's $422.8 million budget request for fiscal 2001, up 12 percent from the current budget of $377 million for the 3,200-person agency.
The Internet is everywhere and, with it, so is fraud. The SEC believes that they are battling a new form of investment fraud that has been proliferating in Internet junk mail, online newsletters, electronic ``chat rooms'' and Web sites. Investors across the country have lost millions in Internet-related schemes in recent years.
The SEC hopes to add 15 people to its ``Cyberforce'' team, now some 240 strong, which prowls the Internet on the lookout for investment scams and other securities fraud. Currently, SEC fraud-fighters do conduct Internet surveillance, they don't have the legal authority to go undercover online. These actions are in line with the increased commitment the agency has made to uncover high-tech start-ups who try to inflate company value for investors.