When the state of Oklahoma brought criminal charges against WorldCom's Bernie Ebbers a few weeks ago, SEC Chairman William Donaldson wasn't pleased. That was the latest in a series of high profile cases where state authorities upstaged the SEC in enforcement actions against public companies.
Chairman Donaldson had warned states against "one-upping" the federal regulator, and vowed to find alternative approaches to the turf wars that seemed to be developing.
This weekend, the SEC Chairman announced a new initiative - creation of a new working group between the SEC and state authorities to find ways to coordinate enforcement investigations.
The group will establish a protocol for who will handle cases that both the SEC and the states are interested in, and how communication will be improved between the two regulators.
Half of the twelve member task force will be named by the SEC and half by the board of governors of the North American Securities Administrators Association (NASAA).
In announcing the plans for the task force at the annual meeting of the NASAA, which represents state regulators, Chairman Donaldson warned regulators against "tripping over each other" for media attention. "If it appears each of us cares more about getting there first, instead of getting it right, the public will question the fairness and integrity of our process," said Donaldson.
"We're serious about it," Donaldson said. "It's something we're going to implement."